Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — Oral Answers to Questions

Mr. Speaker: Order. I remind hon. Members once again that long supplementary questions serve to stop someone else being called.

ENVIRONMENT

Footpaths

Mr. Andrew F. Bennett: asked the Secretary of State for the Environment how many miles of footpaths have been closed in the past five years; and how many miles of footpaths have been created in the same period.

The Under-Secretary of State for the Environment (Mr. Neil Macfarlane): The figures are not available.

Mr. Bennett: Will the Minister accept that that is a disappointing answer? Will he also accept that more and more people go walking and that they want more and more facilities for walking and that these can be provided only if more footpaths are created? Would it not be a sensible use of the large numbers of people who are unemployed at the moment to use them to clear obstructed footpaths, to drain or provide better drainage on many of the footpaths that are over-used and generally to improve footpath amenities?

Mr. Macfarlane: I dare say that you, at least, Mr. Speaker, were pleased with my opening remark.
I note what the hon. Gentleman has said and I certainly accept that there might he some interesting aspects to the final part of his question, but the important thing to remember is that on 28 February part III of the Wildlife and Countryside Act 1981 concerning public rights of way comes into force. Everybody will acknowledge that this can give tremendous help in ensuring that existing procedures for both the creation and stopping up of footpaths are acknowledged by all.

Mr. Nicholas Winterton: I recognise the important part that footpaths can play in recreation and leisure, but does my hon. Friend agree that footpath societies and ramblers associations should be more flexible when farmers and other individuals whose property is affected apply for a diversion of a footpath but not a closure? At the moment they seem to oppose everything just for the sake of opposing it.

Mr. Macfarlane: I am not certain that I would echo my hon. Friend's sentiments entirely. The Ramblers Association has an opportunity to produce figures from time to time if it so wishes. I do not want to comment on that dispute today.

Dr. David Clark: Will the Minister take up the latter point of my hon. Friend the Member for Stockport, North (Mr. Bennett) about the improvement of footpaths? Will it be possible for the Minister to press the national parks authorities, or perhaps send them a circular asking them to make it a deliberate act of policy to employ people to try to improve footpaths in areas where they are badly worn?

Mr. Macfarlane: I believe that the hon. Gentleman's comments will be observed in the fullness of time. Local authorities have the necessary powers to enable that to be done. It is up to individual authorities to decide, in the light of the total recreational needs of the area and the resources available, whether that footpath provision is adequate or should be augmented. That is the best way to approach the matter.

Council House Sales

Mr. Adley: asked the Secretary of State for the Environment if he will list those local authorities against which he is currently contemplating action for their failure to comply with the law relating to the sale of council houses to sitting tenants; and if he will make a statement.

The Minister for Housing and Construction (Mr. John Stanley): With permission I will publish in the Official Report the authorities under formal warning that my right hon. Friend is contemplating use of his powers of intervention under section 23 of the Housing Act 1980 either on behalf of their tenants generally or on behalf of a specific tenant or tenants who are experiencing delay. Progress on the right to buy is now generally satisfactory and I estimate that since the Government were elected the number of sales in Great Britain is now approaching half a million.

Mr. Adley: To encourage my hon. Friend to do what he can to ensure that the will of the House is carried out and that the benefits of the legislation that has been passed are made available to those who are still being deprived, may I, on behalf of many of my constituents thank him for and, indeed, congratulate him on, the diligence and perseverance with which he has seen through the House and put on the statute book what is perhaps one of the most significant pieces of social legislation that we have seen for a long time?

Mr. Stanley: I am grateful to my hon. Friend. I entirely agree with what he said about the immense social importance of emancipating financially so many hundreds of thousands of families in this country.

Mr. Woodall: Will the Minister give the figure for the number of council house starts to replace the 500,000 council houses that are being sold?

Mr. Stanley: We shall come to that in a later question, but I can tell the hon. Gentleman that there has been a substantial increase in public sector housing starts this year.

Mr. Durant: Is my right hon. Friend looking, in his current Housing and Building Conrol Bill, at the onerous restrictions and covenants that are placed by many local authorities on the ability of people to buy their council houses?

Mr. Stanley: My hon. Friend is on to an important point. A provision in the Bill before the House makes it


clear that the criterion of reasonableness applies to all covenants and conditions that are imposed on council tenants who exercise their right to buy.

The authorities are as follows:

Ashfield*
Barking and Dagenham
Bassetlaw
Brent
Gateshead
Greater London Council*
Greenwhich
Hackney
Islington
Lambeth
Leicester
Lewisham
Newham
St. Helens*
Sheffield
Southwark
Stockton-on-Tees*
Thamesdown*
Wolverhampton

* The warning is in respect of only a specific case or cases.

Empty Industrial Premises (Rating)

Mr. Chapman: asked the Secretary of State for the Environment what progress has been made in his review of the operation of provisions relating to the rating of empty industrial premises.

The Secretary of State for the Environment (Mr. Tom King): Whilst I am continuing to keep this under close review, my hon. Friend is aware that local authorities already have full discretion either to reduce further or to waive rates on empty industrial premises. I hope that all authorities will take this into account in the light of the difficult problems faced by industry at the present time.

Mr. Chapman: As many local authorities have disregarded that advice, does my right hon. Friend not think it absurd that owners of factories and warehouses are having to remove the roofs of their premises to avoid a continuing and crippling rate burden? Will he promise to complete his review and have a word with our right hon. and learned Friend the Chancellor of the Exchequer in good time before the Budget on 15 March?

Mr. King: I am well aware of the concern over these matters. My hon. Friend has drawn attention to it before in the House. I shall be talking to my right hon. Friends on this and other matters. I am prepared to give that undertaking.

Mr. Stephen Ross: Is the right hon. Gentleman aware that there are many local authorities—not all Tory controlled—which would like to help in this respect? However, the legal advice that is being given to them is that they can opt for the three-month relief or knock off rates altogether. It appears that a local authority cannot opt for a six-month release or a nine-month release, which to some of us are periods that make sense. The effect on authorities is that they lose income by granting this relief. Will the right hon. Gentleman consider that aspect?

Mr. King: I might be able to help the hon. Gentleman. The gross period cannot be altered, but the percentage can of the rate that is charged. That will have exactly the same effect over a year. It is open to a local authority, at its discretion, to reduce the percentage rate that it chooses to charge. The Government thought it right, in the most

recent local government legislation, to reduce the liability to 50 per cent. However, it is in a local authority's discretion to reduce it further or to waive rates altogether. I understand that 156 authorities waive rates altogether.

Mr. Hugh D. Brown: Was that not a non-reply? Will the right hon. Gentleman make clear whether he is prepared to offer guidance to local authorities on this subject? If he were to do so, would the guidance cover Scotland as well? What would be the estimated total loss of rate income at current prices?

Mr. King: It is not possible to make such an estimate, because we do not have the necessary figures. I made it clear in the main answer that I hope that all authorities will take into account the difficult problems that are being faced by industry. Whether this will apply to anyone in Scotland must depend, I suppose, on whether anybody in Scotland is listening.

Mr. Ward: When my right hon. Friend is considering the reform of domestic rates, will he bear in mind the crippling effect of industrial rates? Will he ensure that that is not made greater by transferring an extra burden from the domestic to the industrial sector?

Mr. King: My main answer made it clear that I am conscious of the impact of industrial rates. There has been some discussion in the House about the impact on industry. I note that the rating proposals of the Birmingham city council and the reduction in the rate will save British Leyland £676,000 on its rate bill in the coming year. I am sure that the House, recognising the problems faced by British Leyland, will welcome that. Equally, I hope that the House will condemn the likelihood that that reduction will be more than lost by the increase proposed by the Labour-controlled West Midlands county council.

Home Improvement Grants

Mr. Hicks: asked the Secretary of State for the Environment if he will increase the existing £225 rateable value limit for eligibility for home improvement grants; and if he will make a statement.

Mr. John Stanley: The rateable value limits are kept under review, but there are no present plans for an increase.

Mr. Hicks: Does my hon. Friend agree that in country areas especially, property such as former vicarages, farmhouses and amalgamated cottages play an essential part in meeting local housing needs? Will he recognise that these houses are essentially old and often in need of repair? Therefore, the limit should be increased.

Mr. Stanley: My hon. Friend will be aware that it has been the view of successive Governments that improvement grant expenditure should be concentrated on lower value properties because of the likelihood that the owners of such property will be most in need of public expenditure. I assure my hon. Friend that rateable values have not changed since 1977, when the last rating revaluation took effect. Therefore, there has been no effective deterioration in the number of dwellings that are eligible. A high proportion of the dwellings that are in need of improvement fall below the rateable value limits and are therefore eligible.

Mr. Cartwright: Does the Minister accept that one of the problems revealed by the English house condition


survey, especially in London and the south-east, was a deterioration in the condition of many of the homes belonging to elderly owner-occupiers? Clearly, pensioners have particular problems in negotiating the complexities of the improvement grant system. What action is he taking to deal with this problem?

Mr. Stanley: We have to help the low-income groups, including the low-income elderly. We have extended the 90 per cent. grant until the end of the 1983–84 financial year. An important issue is raised in helping people to get the necessary advice and to take advantage of the available grants. We are encouraging the building societies—I did so at a Building Society Association seminar last Friday—to work with local authorities in helping to provide agency services for the elderly.

Football Authorities (Meeting)

Mr. Canavan: asked the Secretary of State for the Environment what subjects he expects to discuss at his next meeting with the football authorities.

Mr. Macfarlane: There is no fixed agenda at this moment, but, as the House will expect, uppermost in my mind is violence associated with football.

Mr. Canavan: Will the Minister arrange a meeting with his Scottish counterpart and all the football authorities to discuss the vexed question of charges for the policing of football grounds, which have to be met out of the limited resources of the clubs? As the problem is even worse in Scotland, where, for example, the SFA had to fork out £17,000 to police only 25,000 spectators at the Scotland v Wales international at Hampden last year, will the hon. Gentleman consider providing free police cover for public meetings, or does he want a situation to develop whereby some of the policemen strolling around the park will be paid more per hour than some of the players on the field?

Mr. Macfarlane: I suspect that in the latter part of the hon. Gentleman's supplementary question he was dealing with the exception rather than the norm. I do not undertake to promote the view that he has presented. It is a sad reflection on the level of violence that most people expect at some football matches nowadays, certainly in the professional game, that there has to be a large police presence. These are matters that will have been taken on board by my appropriate colleagues in the Scottish Office. However, they are predominantly matters for the Home Office in England.

Mr. Farr: Some of the recent outbreaks of hooliganism among soccer crowds may cost a lot of money to correct, because money will have to be spent on taking appropriate safety measures. Will my hon. Friend consider approaching our right hon. and learned Friend the Chancellor of the Exchequer before the Budget with a view to easing the burden of VAT and other taxes on some soccer clubs?

Mr. Macfarlane: Those representations have been made to me by various representatives of the football authorities and the pools promoters. I take note of what my hon. Friend says.

Mr. Lofthouse: What advice will the Minister give to the football authorities to deal with the louts who are threatening the very existence of a great football club within 12 miles of my constituency?

Mr. Macfarlane: I do not think that anybody underestimates the severity of the events of last Saturday. They were deeply depressing and I do not suppose that anyone wants to see a great club go under because of the actions of fewer than 1 per cent. of the spectators on that occasion. I can only hope that the football commission, which is investigating the occurrence, as well as my officials, who visited the ground last week, will unearth exactly what went wrong. A problem is coming this Saturday, when there will be four major cup ties in our capital city. No amount of planning and preparation by the football clubs, the football authorities and the stadium authorities will ensure that these wretched louts are eliminated.

Mr. Nicholas Winterton: Does my hon. Friend agree that it is not the football clubs that are to blame for this ridiculous and disgraceful hooliganism? The courts do not appear to hand out the right sentences to those who are convicted of hooliganism and vandalism. Will he make the strongest representations to the Home Secretary to ensure that our judiciary deals with the issue in a much more forceful and robust manner?

Mr. Macfarlane: I am grateful to have my hon. Friend's support. The Criminal Justice Act 1982 gave the courts greater power and authority than they had ever had before. I can only wish that the magistrates courts will use some of the 120 attendance centres.

House Condition Survey 1981

Mr. Alton: asked the Secretary of State for the Environment if he will make a statement on the house condition survey 1981.

Mr. Winnick: asked the Secretary of State for the Environment if he will make a statement on the English house condition survey 1981.

Mr. Stanley: I refer the hon. Members to the answer I gave to my hon. Friend the Member for Chipping Barnet (Mr. Chapman) on 14 December.

Mr. Alton: Does the Minister dispute the findings of the survey, which shows that one house in 10 is unfit to live in or is in a serious state of disrepair? Does he dispute the finding of the House of Commons Select Committee inquiry that we shall be short of more than 420,000 houses by 1984? Is he aware that in cities such as Liverpool people are living in houses that are unfit for human habitation and that many council house tenants inhabit houses that are damp or in a serious state of disrepair? What will he do about that?

Mr. Stanley: I do not dispute the findings of the English house condition survey of 1981, which the Government have published. I remind the hon. Gentleman that the five-year period which the survey covered included the time of the Lib-Lab pact, when the Opposition had some responsibility for these matters. I also remind him that the present level of improvement grant is way in excess of any level that was achieved during the Lib-Lab pact.

Mr. Winnick: With more than 1 million homes being unfit and about 900,000 houses lacking one of the basic amenities, is the Minister aware that, instead of the housing cuts of the past few years, what is required is an emergency building programme to ensure that all our


people can live in decent conditions? Does he agree that it would make much more sense to employ people now on the dole queue, especially construction workers, to do the work for which they were trained in the first place?

Mr. Stanley: I invite the hon. Gentleman to consider what is now happening with regard to home improvement. The expenditure on home improvement grants is more than doubling this year. For example, grants for the disabled are three times higher than when the Government came to office, and repair grants are 70 times what they were in 1979. For last year, we look like having the highest number of improvement grants in any year since 1974.

Mr. Flannery: What about unemployment?

Mr. Steen: Is my hon. Friend aware that Liverpool city council has accumulated 5,000 empty council properties? Is he further aware that the council is refusing to allow people on the waiting list to move into those houses and pay for the repairs themselves? Will he tell the leader of the Liberal council that unless he allows people to help themselves, the Government will stop aid to the city?

Mr. Stanley: We regularly encourage all local authorities to make use of their empty properties by selling them, so that the purchasers can make the improvements themselves with the aid of improvement grants. Homesteading is an important part of our policy. I hope that the council in Liverpool will use homesteading with the same enthusiasm as many Conservative councils have done.

Mrs. Ann Taylor: Does the Minister agree that the real rate of increase in the number of unfit properties recently is 41 per cent.? By what method and by whom were the 1976 figures for unfit houses changed? Does he agree that the report explains why those figures were changed, but not how they were changed? Were those changes made by technically qualified officers? If not, by whom were they made? Does the hon. Gentleman agree that that was an exercise in cooking the books to disguise the effects of Tory cuts?

Mr. Stanley: The hon. Lady has scored an own goal. The 1981 house condition survey shows that the 1976 house condition survey, which was carried out by the previous Government, seriously underestimated the quantity of unfitness and disrepair.

Council House Sales (Mortgage Repayments)

Mr. Newens: asked the Secretary of State for the Environment if he will arrange for the central collection, under different headings designed to show the reason for the inability, of the numbers of former council house tenants who purchase council houses but are unable to meet mortgage repayments.

The Under-Secretary of State for the Environment (Sir George Young): No. Sir.

Mr. Newens: Is it reasonable to conclude from that answer that, for political reasons, the Minister is anxious to conceal the number of former council tenants who are unable to maintain their mortgage repayments because of break-up of marriage, injury at work, unemployment, separation and other factors, and are faced with homelessness because the council cannot rehouse them? What advice does he give to councils that are faced with that problem?

Sir George Young: As I think the hon. Gentleman knows, the Government are perfectly happy to make available the statistics that we have on the subject, but they are not available in the form for which he has asked. My hon. Friend the Minister for Housing and Construction gave the figures in answer to a written question. On the basis of the evidence that is available, we are not satisfied that it is such a substantial problem that a completely new type of form should be introduced, both for building societies and for local authorities, to collect the type of information for which the hon. Gentleman has asked.
The advice must be that if people are suffering hardship they should be reminded that supplementary benefit is available to help with their interest payments and that they should talk to their lending authorities to see whether arrangements can be made to help them.

Mr. Heddle: Does my hon. Friend agree that some former council tenants who exercised their right to buy obtained their mortgage from the local authority? Is he aware that they may now meet some difficulty in making their repayments, because they are paying perhaps 2½ per cent. more in mortgage interest rates than they would if they transferred their mortgage to a building society? Will he confirm that his Department is doing all that it can to encourage local authorities to re-fund their mortgages with building societies?

Sir George Young: My hon. Friend has done the public a service by reminding them that they can switch their mortgage from a local authority to a building society when there is a differential in the interest rates. The figures show that of 5½ million building society mortgages, only 3,660 were substantially in arrears at the end of 1981. That puts the problem more into perspective than did the emotive remarks of the hon. Member for Harlow (Mr. Newens).

Mr. Andrew F. Bennett: Does the Minister agree that his answer was complacent? He mentioned the number of people who faced foreclosures, but there are many thousands more who are extremely worried about the problem. Does he agree that the Government have a special responsibility to those who have been caught by the two prongs of the Government's policy, by which they have been encouraged to buy council houses and then been affected by the Government's deliberate creation of unemployment?

Sir George Young: The hon. Gentleman has left out a very important prong of the Government's policy, which is to bring down interest rates. The substantial fall in mortgage interest rates is of real benefit to those who are buying their homes.

Council Houses (Leicester)

Mr. Greville Janner: asked the Secretary of State for the Environment how many council houses were built in the city of Leicester in each of the past five years for which records are available.

Sir George Young: In the five years 1977 to 1981, 1,154, 1,127, 960, 678 and 297 dwellings, respectively, were completed by Leicester city council.

Mr. Janner: Is the Minister aware that that catastrophic drop in council house building has been caused entirely by the Government cutting off the


necessary funds? Is he further aware that about 30,000 people in Leicester are on the housing waiting list and that not only is he causing great hardship for those who are least able to bear it, but he is supervising the demolition of our local house construction industry?

Sir George Young: The hon. and learned Gentleman would do well to direct his indignation towards Leicester city council. Towards the end of last year my hon. Friend the Minister for Housing and Construction made it clear that he would entertain additional bids from local authorities that wanted to supplement their HIP allocation for the current year. As he has said, another £160 million has been made available. Sadly, we did not hear from Leicester city council.

Mr. Jim Marshall: Is the hon. Gentleman aware—if he is not will he have a word with his hon. Friend the Minister for Housing and Construction, to whom I wrote on the subject last week—that recent investigations into an estate in the city of Leicester reveal structural defects in just under 1,000 houses? Will he give the city council two undertakings? First, will he authorise the city council, if demolition is required, to have an increase in the HIP allocation to cover rebuilding the houses? Secondly, will he assure those who have exercised their right to buy—27 people are involved—that they will be extended the same conditions as the Government announced for Airey houses earlier this week?

Sir George Young: I assume, or rather I hope, that the hon. Gentleman is referring to the Saffron lane estate, information about which came to light fairly recently and too late to be included in next year's HIP allocation. We shall be in touch with the local authority to see how that problem can be overcome.

Mr. Farr: As the rate of building seems to have declined rapidly under a Labour council in Leicester, will my hon. Friend consider writing to the council to remind it of its duty to the public in general and the need to maintain a suitable council house building programme in its area in particular?

Sir George Young: The figures that I gave were for completions. The figures for starts are more encouraging. There were 720 public sector starts in the first nine months of 1982 in Leicester, compared with 467 for the whole of 1979.

Local Authority Manpower

Mr. Robert Atkins: asked the Secretary of State for the Environment if he is satisfied with the progress local authorities are making in reducing their staff numbers.

Mr. King: Total local authority manpower in England has been reduced by approximately 174,000—6·9 per cent.—full-time and part-time staff since 1979 and is now back to the level of 1972. But the rate of reduction has been slowing recently. I believe that there is scope for further reductions to reverse that tendency and I look to all local authorities to continue their efforts.

Mr. Atkins: Does my right hon. Friend accept that there are still many councils—most of them Labour-controlled—which employ people in ridiculous jobs, such as minders for prostitutes and play leaders, at highly inflated incomes? Does he agree that many authorities

should do more to reduce their manpower—for example, by putting out the sale of council houses to private enterprise?

Mr. King: There is continuing scope for further reductions in local authority manpower. I hope that all authorities will realise the importance of that. I hope that my earlier illustration of the assistance that one council—I cited Birmingham, but there are others—gave to industry by reducing rates will be noted by everybody. The number of authorities that have large budgets and increasing staff in an attempt to support industry will find that the best contribution that they can make is to restrain their expenditure.

Mr. Hooley: What evidence has the Minister that, by creating unemployment in the public service; he has created any additional employment in manufacturing industry?

Mr. King: I find that question, coming from an hon. Gentleman who represents the city of Sheffield and who knows the state of rates in that city and their impact on industry—

Mr. Hooley: I also know the state of industry.

Mr. King: The hon. Gentleman knows their impact on industry and also the retail sector. It is staggering that he stands before the House and makes such comments.

Mr. Stephen Ross: Does the Secretary of State now accept that the introduction of the most complicated and disastrous unified housing benefit scheme will add greatly to the costs of local authorities, which are bound to employ additional staff to run the scheme?

Mr. King: It is recognised that there might be some additional staff required to run the scheme, as there is a saving in staff at the DHSS. I thought that the House basically agreed that the scheme was a more sensible approach. I hope that it will be appreciated by its recipients, as it will avoid the confusing position that previously existed.

Mr. Stokes: Is my right hon. Friend aware that private manufacturing industry, which has cut its numbers to the bone, looks with amazement and dismay at the still high staffing levels in local authorities—which are responsible for the high rates that industry must pay?

Mr. King: I entirely understand my hon. Friend's point. I have never ceased to emphasise that it is important that everybody, whether in the public or private sector, realises that they have a joint concern for the prosperity of their own areas. I am anxious that there should be the closest consultation between the private sector and local authorities. A number of local authorities of all political pursuasions are now recognising the importance of that. I hope that the message is getting across that it is important to keep rate levels to the minimum.

Rate Poundage

Mr. Teddy Taylor: asked the Secretary of State for the Environment how many district and borough councils have reduced their rate poundage over the past three years; and what has been the average increase over this period.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): Between 1980–81 and 1982–83 there


were reductions in the reported average local rate poundages of 30 districts and boroughs. General rate poundage in England rose by an average of 37 per cent. over the period.

Mr. Taylor: Some councils, such as Southend-on-Sea, have a remarkable record in reducing their borough rate. Does my hon. Friend agree that some horrific increases in other areas are destroying jobs and causing a great deal of hardship? As Southend has shown that rates can be reduced, would not my hon. Friend be justified—in anticipation of rating reform—in putting a maximum increase on all rate poundages?

Mr. Shaw: There has been a substantial increase in precepts and rates, which have offset in almost every case the reductions that districts and boroughs have made. Of the 30 boroughs that have achieved such reductions, 23 were under Conservative control. However, the precept increases more than offset the reductions. My hon. Friend will recognise that supplementary rates have already been made illegal by an Act of Parliament last year.

Mr. Proctor: Is my hon. Friend aware that the Conservative-controlled Essex county council has forecast a rate increase this year of 5 per cent., whereas the Labour-controlled Basildon district council has forecast a rate increase of 40 per cent.? Will my hon. Friend give firm advice to Basildon district council that it should reduce its spending to save jobs in Basildon?

Mr. Shaw: There can be no more eloquent testimony than my hon. Friend's remarks to the policy that my right hon. Friend has sought to pursue in making this year's rate settlement.

Development Corporations (Assets)

Mr. Hal Miller: asked the Secretary of State for the Environment if he will now make a statement on the terms for transfer of assets from development corporations to local authorities.

Sir George Young: We are establishing guidelines on the terms of transfer for community-related assets in the light of our discussions with district councils and, as I told my hon. Friend on 8 December, I hope shortly to be resuming discussions with the association on the terms for future housing transfers.

Mr. Miller: Will there be any income-producing assets—such as commercial and industrial—included in the balanced package on community-related assets to ensure that no undue burden is placed on local authorities arising from the need to maintain other community-related assets?

Sir George Young: I can give my hon. Friend that assurance. The transfer will take place on terms that do not impose an unacceptable burden on district councils. The aim is that it should be broadly neutral on revenue accounts. Assets that cost money will be balanced by assets that are revenue earning.

Mr. Newens: Will the Minister state clearly what assistance he will give to local authorities if they take over assets that are disposed of by the Commission for the New Towns when that is wound up—especially car parks and other assets that lose money? Will he make a better

arrangement than that which he made for the houses affected by design defects, when he refused fully to honour promises made in the House?

Sir George Young: I do not for one moment accept the hon. Gentleman's allegation. I hope that the offer that was made on housing at the end of last year to district councils will be acceptable to them all. The aim is to find a fair balance between the ratepayers taking over the assets and the taxpayers who originally created them.

Dr. Mawhinney: Will my hon. Friend agree officially to consult hon. Members who represent third generation new towns about the detailed proposals for the transfer of assets within their constituencies before the proposals are affirmed?

Sir George Young: I shall ensure that hon. Members who represent the areas concerned are kept fully aware of the negotiations as they proceed between my Department and the district councils.

Mr. Graham: Does the Minister intend to learn from his previous mistakes? Does he recall the bitter resentment caused by the dictatorial and disgraceful terms that he imposed on the transfer of housing assets? Does he now accept that the forced sale of housing, industrial and commercial assets on less than fair terms will have disastrous consequences for new towns and their residents?

Sir George Young: My Department has no powers to force local authorities to take over housing. We have made it clear to the new towns that housing must be in good shape before it is offered to local authorities.

Domestic Rates

Mr. Skinner: asked the Secretary of State for the Environment when he expects to make a statement on the future of domestic rates.

Mr. King: I shall announce our decisions as soon as possible.

Mr. Skinner: Is it not ironic that the Government, who came into power talking about the abolition of domestic rates—

Mr. Robert Atkins: Ask a question.

Mr. Skinner: I said "Is it not". That is a question. Is the Secretary of State aware—as he obviously is—that since the Government came to power they have shifted the amount of rate support grant from 62 per cent. down to 53 per cent. in the next financial year, with the result that instead of abolishing domestic rates they are imposing a burden on the domestic, industrial and other hereditaments involved in rating—which is the exact opposite of the policy on which they were elected? Has there not been a shift away from the taxpayer to the ratepayer, even though the Government said that they would abolish rates?

Mr. King: It would have been even more ironic had the hon. Gentleman not quite made it to the Chamber in time for his question. I congratulate him on the speed with which he constructed his supplementary question while not being wholly aware of the contents of his original question when he entered the Chamber. The hon. Gentleman said that we were imposing higher rate burdens. If he had been in the Chamber a little earlier he would have heard of


Conservative councils up and down the country which, far from imposing higher rate burdens, are to make substantial reductions.

Mr. Colvin: Is my right hon. Friend aware that the least that the House expects on the issue of domestic rate reform is a White Paper to be presented to the House and, in due course, a commitment in the next Conservative general election manifesto to the removal of this monstrously unfair—although I accept efficient—tax, which, incidentally, unnoticed by the hon. Member for Bolsover (Mr. Skinner), was conspicuously absent from the last Conservative manifesto?

Mr. King: I am more than aware of what the House expects, even if the expectation is not always the same in every corner of it.

Mr. Kaufman: When do the Government intend to honour the Prime Minister's personal commitment to abolish domestic rates?

Mr. King: I have nothing to add to the answer that I have just given.

Grants (Local Government)

Mr. Hooley: asked the Secretary of State for the Environment what percentage increase or decrease in real terms—net of inflation—occurred in central Government rate support and other grants for all purposes to local government in England year on year in 1979–80, 1980–81, 1981–82 and 1982–83.

Mr. Giles Shaw: On the basis of the deflators normally used, central Government grants and subsidies to local authorities in England fell by about ½ per cent. in real terms between 1979–80 and 1980–81, and by about 9½ per cent. between 1980–81 and 1981–82. Comparisons with 1982–83 cannot be made until outturn information for 1982–83 pay and price changes is available.

Mr. Hooley: Do not those figures show that the Government have no intention of providing the resources that local electors are entitled to expect, to maintain and improve standards of health, housing, education and other civic amenities?

Mr. Shaw: I understand the hon. Gentleman's question, but it is a fact that local authorities must share in the overall necessity to reduce public expenditure. It is also a fact that the Government have introduced a number of other grants to assist local authorities, such as the urban development grant, which in many cases have made a substantial contribution.

Mr. Campbell-Savours: Why have the Government reduced the northern region's percentage share of total national allocation of HIP from 5·7 per cent. in 1981–82 to 5·4 per cent. in 1982–83, while, at the same time, they have increased the share for the southern regions? Why are we in the northern region being penalised? Do the Government believe in a divided society, north against south?

Mr. Shaw: I reject completely the hon. Gentleman's final assertion. The object is to ensure that inflation is reduced and that under public expenditure policies every region will benefit. I shall ask my hon. Friend the Minister for Housing and Construction to write to the hon. Gentleman about the northern region's HIP allocation.

England Football Team (South American Tour)

Mr. Dalyell: asked the Secretary of State for the Environment what advice he gave in respect of the proposed tour to South America in 1983 by the England football team.

Mr. Macfarlane: Last September the Football Association chairman sought my advice on whether to include in a short two-match tour of South America in the summer of 1983 a match against Argentina. I told him that the decision was entirely for the Football Association but, in the circumstances prevailing at that time, I would advise against doing so.

Mr. Dalyell: Is it not also a fact that Brazil made it clear that the England team was not welcome? Is not the brutal truth that no British team will be welcome in South America until negotiations on the Falkland Islands start?

Mr. Macfarlane: That is not necessarily the chronological order of events. The hon. Gentleman must try to understand, even if he does not understand all the other aspects of the matter, that it is not time to contemplate a match next June, although it is recognised that there has been traditional hostility aroused between England and Argentina in our footballing history.

Mr. McNally: Is the Minister aware that his advice on tours to Latin America or elsewhere by England's soccer teams will become increasingly irrelevant if he sits passively by while our national game is destroyed at its economic roots by violence? Therefore, will he reconsider his earlier remarks that he had no early plans—

Mr. Speaker: Order. That is another question. The hon. Gentleman has gone back to an earlier question.

Mr. A. M. Alfred

Mr. Hoyle: asked the Secretary of State for the Environment if he will make available in the Library details of the arrangements between Mr. A. M. Alfred, chief executive of the Property Services Agency, and his Department.

Mr. King: Yes, Sir. I have today placed in the Library, and sent to the hon. Member, a note of the details of the arrangements that are particular to Mr. Alfred's limited period appointment.

Mr. Hoyle: I am grateful to the Secretary of State for his answer. Does he agree that it was wrong of Mr. Alfred not to reveal to the officials with whom he was negotiating the fact that the private company into which his salary was paid was set up only six days prior to his appointment? Does he not further agree that that brings into question the honesty and integrity of Mr. Alfred? Should he not be sacked forthwith?

Mr. King: I entirely reject the hon. Gentleman's latter point. It is unfortunate that the hon. Gentleman seeks to pursue it. The matter is not without precedent. A similar arrangement was made under the previous Administration. In this situation I do not presume to indulge with the hon. Gentleman, in a witch-hunt against someone taking on an extremely important post in the public sector.

Mr. Robert Atkins: Is my right hon. Friend taking any steps to look at the operation of the Property Services Agency, whether under the aegis of Mr. Alfred or anyone


else, in its relationship with the Ministry of Defence, among other Departments, particularly because of the difficulty of controlling the operation of the PSA or the MOD in given stations, bases and ship bases?

Mr. King: I shall have talks shortly with Mr. Alfred on proposals for the future organisation of the PSA. My hon. Friend is aware that I have not been closely involved with that part of my Department. I shall take a close interest in it, because it is an extremely important area of my Department.

Council House Building

Mr. Gwilym Roberts: asked the Secretary of State for the Environment if he is satisfied with the current level of council house building starts; and if he will make a statement.

Mr. Stanley: It is for each local authority to determine the balance between new build and improvement and how much of its single block allocation and its capital receipts it uses for housing. However, local authority starts up to the end of November last year were 32 per cent. up on the same period in 1981 and total public sector starts were 39 per cent. up.

Mr. Roberts: Does the Minister recall that he and his colleagues frequently told me, when Labour was in control of Cannock Chase district council, that one of the factors that affected the house building programme was the council's failure to sell council houses? Now that the Tories and Liberals are in joint control of the council and are selling council houses like hot cakes, will the Minister explain why the council housing programme has virtually collapsed? Will he come clean with the House and accept that the Tory Government's financial programmes have virtually destroyed all hope for hundreds of thousands of people on council house waiting lists?

Mr. Stanley: I do not agree with the hon. Gentleman. There was a substantial increase in public sector house building starts last year.

Mr. Dorrell: Does my hon. Friend accept that the increase in public sector housing starts is a welcome development? Does he further accept that local authorities should now be seeking to concentrate those housing starts on particular sectors of the housing market rather than overall in the housing market, and particularly on single flats for old and young people? Is he aware that a further increase in activity in that area could make a significant contribution to increasing the level of activity in the economy as a whole?

Mr. Stanley: I entirely agree with my hon. Friend. It is now policy in most local authorities to concentrate on meeting specialist needs. I draw the attention of the House to the fact that we have recently published an interesting and helpful book on housing initiatives for single people.

Mr. Winnick: Bearing in mind that the number of new council dwellings remains the same as in the 1920s, why does not the Minister go round the country and see for himself the number of people who are waiting, desperately anxious to be rehoused by the local authority, and who, in the absence of being rehoused, are living in inadequate conditions? Why do not the Minister and his colleagues drop the vendetta against council housing?

Mr. Stanley: The Government are taking a rounded approach to housing in looking at both the public and private sectors. If the hon. Gentleman wishes to look at the public sector, I remind him that since the Government have been in office the public sector stock has increased by over 300,000 dwellings. Public sector improvements have been carried out totalling over 400,000. There is now the highest rate of private sector home improvements since 1974 and private house building, notwithstanding the recession, has increased by 20 per cent. for the second year running.

Mr. Steen: What is the point of building more and more council houses when so many of those already built are standing empty? Should not the Minister spend his money on putting those that are empty into fit order rather than continuing to spend more public money, often building on green field sites?

Mr. Stanley: My hon. Friend is right, and that is the conclusion drawn by a great many local authorities. To endorse what my hon. Friend has said, when local authorities have nearly 300,000 dwellings that are difficult to let and nearly 20,000 dwellings that have been vacant for more than a year in the public sector, it makes entirely good sense for local authorities to concentrate on better utilisation of existing stock.

Mrs. Ann Taylor: Does the Minister recall his Government's decision in 1979 to cut spending on housing by half? Is he now advocating more spending because he recognises the folly of that decision, or because he thinks that an election is near?

Mr. Stanley: The hon. Lady will recall that the public sector house building programme declined in every year under the previous Government since 1975. With regard to the immediate availability of finance, local authorities entered this financial year with £800 million capital receipts unspent, and half way through the financial year they had spent only 35 per cent. of the allocations, plus receipts. The Government made substantial provision in terms of allocations plus cash for local authority purposes.

Council Flats (Security)

Mr. Dubs: asked the Secretary of State for the Environment if he will provide special funds to local authorities so that they may give a higher priority to the installation of locks and entryphones in blocks of council flats.

Mr. Frank Allaun: asked the Secretary of State for the Environment if he will make funds available to local authorities to establish caretakers in walk-up council flats.

Sir George Young: It is for local authorities to decide their own priorities for spending the housing resources available to them. Special allocations for the items mentioned are, therefore, not necessary. The extra capital allocations recently made available for 1982–83 can be used for expenditure on security and entryphones systems and several of the allocations already made have been for those purposes.

Mr. Dubs: Does the Minister agree that such locks and entryphones represent an extremely cost-effective way of reducing the incidence of crime and vandalism on council estates? Is he aware that such devices are welcomed by the police and are being increasingly demanded by council


tenants of local authorities that do not have the money, because of the Government's policy, to provide those facilities? Does the Minister agree that his answer comes oddly from a Government who keep talking about law and order but are unable to do anything practical about it?

Sir George Young: The first half of the hon. Gentleman's question was the most sensible to come from the Labour Benches this afternoon. With regard to the second part of his question, we have made additional resources available to his own local authority. For example, Wandsworth submitted a bid for £1·2 million in November. Of that, £181,000 has gone on eight security work schemes. Resources are available to carry out this important work.

Mr. Allaun: Is the Minister aware that good caretakers can do more than anyone or anything to prevent vandalism? Since the Government have more than doubled rents in three years by removing over £1 billion in subsidy, could not the Minister make compensation for that in this very small way, which would ease the problem?

Sir George Young: The Government have emphasised, through their priority estates project, the importance of local management, and in some cases local management presence has more than covered the extra cost because vandalism has been reduced and occupancy rates have gone up. It would be wrong to have a special allocation to local authorities for caretaking in the housing budget, as local authorities would not welcome that degree of interference by central Government.

Mr. Dickens: Do not local authorities claim that they are spending millions of pounds a year on rectifying vandalism? If this is the case however, is not the money available, because if local authorities introduced security measures this would cut expenditure on vandalism, which would be a cost-benefit to the authorities?

Sir George Young: My hon. Friend has made the point clearly.

Mr. Campbell-Savours: Has the Minister noted the recent spate of television programmes, and other reports in the media, about violence and vandalism in deck access flats in London and elsewhere? Does not the House of Commons deserve some reply, so that hon. Members can assure their constituents that the Government accept that a problem exists, and thus reassure them about the future? Should not the Minister do something?

Sir George Young: The Government have made available a range of advice and guidance to local authorities, but at the end of the day it is for the local authorities to decide what scheme is best for their own estates. The detailed knowledge of these is not available to Ministers and it would be wrong for us to interfere in this specific way.

Sale of Land

Mr. Greenway: asked the Secretary of State for the Environment if he will now take steps to ensure that land on the land registers suitable for house building is sold by local authorities and other public sector owners to the private sector.

Mr. Giles Shaw: Further action is now in train to secure disposal of registered land. Formal letters have

been sent to the owners of 78 sites, both local authorities and some nationalised industries, asking them to declare their intentions for the use or disposal of the land. In the light of the replies my right hon. Friend will consider in each case whether he should direct disposal.

Mr. Greenway: I welcome the progress revealed in my hon. Friend's reply, but may I press him to go as fast as he can? Is he aware that there are many local authorities and public sector bodies holding land that entrepreneurs would gladly take over and upon which they would build homes that people would want to buy?

Mr. Shaw: I accept my hon. Friend's point that there must be proper disposal of land for which there is no present use. I remind my hon. Friend that about 6,000 acres on the national land register have already been sold or are under negotiation.

Mr. Stephen Ross: Does the Minister accept that there are local authorities, in my constituency and elsewhere, where the housing list is still very long, and therefore it makes sense for the local authorities to have some land up their sleeves so that they can continue with their public sector building programme, which is the only hope for many people?

Mr. Shaw: There is no reason why local authorities should not have plans for the disposal of the land. This is land for which there is no present or forecast use.

Mr. Skinner: Will the Minister ensure that a little note is sent to the Foreign Office—and make sure that the Prime Minister knows about it—on this matter of selling land, so that when the Foreign Office comes to consider all that land in the Falkland Islands, which is supposed to be British to the core, it can be treated in the same say, and sold off to the people who live there?

Mr. Shaw: I scarcely think that that question is worth answering.

Mr. Skinner: Try.

Mr. Steen: While it is true that the Government have seen that 6,000 acres on the register have been sold off, 94,000 acres remain. What plans do the Government have to sell off public land that is vacant—land that includes 3,000 acres held by my hon. Friend's Department?

Mr. Shaw: The Department has a policy of seeking to dispose of all Government-owned land on the register. I remind my hon. Friend that about 66 per cent. of land register land is in the hands of local authorities, and about 19 per cent. is in the hands of statutory undertakers. I accept that a great deal remains to be done, but only about 10,000 or 11,000 of the 94,000 acres to which my hon. Friend is referring may be available for proper development for housing.

Maxis System

Mr. Eggar: asked the Secretary of State for the Environment when he expects to introduce the new Maxis system into his Department.

Mr. King: Maxis budgeting is already under way with a view to full implementation from 1 April this year.

Mr. Eggar: I congratulate my right hon. Friend on the development work that has gone on within his Department, and on his personal commitment to the


development of this important management and accounting tool. What is his Department doing to ensure that this system and the Minis system are adopted in other Departments?

Mr. King: That is a difficult question for me to answer. I am grateful to my hon. Friend for his opening remarks, and I congratulate him on the close interest that he is taking. He may like to know that one of my first interests on taking over my new responsibilities was to look at the operating budget of my Department for the coming year. Thanks in good measure to the work of officials and my predecessor as Secretary of State for the Environment, I anticipate that the administrative costs of running my Department next year will be, in cash terms, 5 per cent. less than it was two years ago, and that is after absorbing 10 per cent. inflation.

First-time Buyers

Mr. Durant: asked the Secretary of State for the Environment what is his latest estimate of the total number of first-time buyers who are not council tenants who have been able to buy through the Government's low-cost home-ownership initiatives.

Sir George Young: We estimate that between April 1979 and September 1982, 23,000 dwellings in Great

Britain were sold through low-cost home ownership initiatives involving local authorities, new town corporations and housing associations. In many cases, these will have been sales to first-time purchasers. Three-quarters of local authorities in England have indicated an intention to take up one or more of the low-cost home-ownership initiatives in 1982–83.

Mr. Durant: Does my hon. Friend agree that this is a most welcome development? Will he do all that he can to persuade other local authorities, which are not taking part in this initiative, to adopt it? Does he further agree that the schemes introduced by our hon. Friend the Minister for Housing and Construction have made available a variety of opportunities for young people to become first-time house owners?

Sir George Young: My colleagues and I will continue to do all that we can to persuade other local authorities to pursue this initiative, which can in many cases be geared to people on the waiting list and therefore prove of direct advantage to local authorities.

Mr. Speaker: Statement. Mr. Peter Walker.

Mr. Robert Hughes: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I take points of order after statements.

Council of Fisheries Ministers

The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): With permission, Mr. Speaker, I wish to make a statement on the Council of Fisheries Ministers yesterday in Brussels, at which I represented the United Kingdom together with my right hon. Friends the Secretary of State for Scotland and the Minister of State.
I am pleased to inform the House that a full and unqualified agreement was reached on a common fisheries policy precisely in the terms reported to this House as agreed between nine of the 10 member states in December. The agreement reached yesterday had the full approval of the three main fishing organisations.
The agreement will last for 20 years and therefore will provide a very firm long-term basis for our fishing industry to take advantage of the substantial benefits it receives from it.
The quotas we have obtained are above our actual catches in the years 1973 to 1978, which is the period that was used as a basis for calculating quotas. The quotas agreed for the seven main species of edible fish, which are the species of dominant importance to the United Kingdom fishing industry, provide Britain with 37·3 per cent. of the stocks in European waters, a figure higher than our actual catch for most stocks even in exceptional years.
The quotas that have been achieved are in stark contrast to the offer of 31 per cent. incorporated in the first proposal with which I was confronted when the United Kingdom was in a minority of one.
Perhaps the most important aspect of agreeing such good quotas and the technical measures on conservation is that they are coupled with an agreement on an effective enforcement system. Consequently, we now have the prospect that fishing stocks over the coming decades are likely to increase rather than deteriorate, therefore giving our industry the potentiality of growth instead of decline. Each member state will enforce these measures in its own waters but subject to Commission supervision to ensure that such enforcement really is effective.
The Council clarified the position on western mackerel by an agreed statement that rights to fish will be accorded only to those who have established a traditional fishery. There was a specific renunciation of any claim to western mackerel on the part of Denmark. It was also made clear that the 2,000 tonnes of North Sea cod, which were made available to Denmark from Norway and were outside the quota arrangements, was a commitment limited to three years.
On access, the agreement provides British fishermen with a better dominance of our coastal waters than anything that they have enjoyed in the history of the British fishing industry. Previously existing historic rights in our six-to-12 mile limit, some under the terms of the London Convention and others in the Treaty of Accession, have been reduced or altogether extinguished along nearly three quarters of the coastline where these rights previously existed. We have also obtained valuable rights in the six-to-12 mile limits in French, Dutch, German and Irish waters.
Contained within the package are important proposals on structures, where, over a three-year period, Community

grants will be available up to a total of £140 million. The bulk of these funds are allocated to measures which are of particular interest to the British industry.
Agreement was also reached on the Community's 1983 reciprocal fishing agreements with Norway, Sweden and the Faroes as well as on fishing in the Skagerrak and Kattegat. These arrangements are all satisfactory and agreement has the important benefit that our vessels can, from today, re-start fishing in Norwegian waters.
I am pleased that, after four years of difficult negotiations, we have obtained this agreement. I would like to record my gratitude to the leaders of the fishing industry who have attended every meeting with me and who have discussed and agreed what we have negotiated. They have welcomed the agreement because they share with the Government the view that this provides the basis upon which the fishing industry can obtain a secure future to the benefit of fishermen and to the benefit of Britain.

Hon. Members: Well done. [Laughter.]

Mr. Walker: There is no doubt that fishing is an area in which it is vital to have a common agreement throughout European waters if growth, as opposed to decline, is to be the future of fishing. I believe the agreements reached yesterday are good for Europe and good for Britain.

Hon. Members: "Hear, hear".

Mr. Norman Buchan: Conservative Members are easily pleased. In the last 24 hours we have been told what a superb agreement has been achieved. A new definition has been found for the term "superb". When one reaches a bad deal, one throws a cocktail party, shouts "Rejoice" and claims that it is superb. The truth, reflected by the fishermen's organisations, as I think the Minister will agree, is very different.
Does the Minister agree with the response of Willie Hay, of the Scottish fishermen's organisation, who said that if there had been a superb agreement it would have meant a 200-mile limit and as much fish as we can catch but that, in the context of the disaster that could have befallen us, the agreement is not too bad? [HON. MEMBERS: "Oh."] That is very far, is it not, from being a superb agreement?
Is it not the case that the Minister warned at the time the deal was basically agreed last September that, if it was not accepted, he would not guarantee proper policing to protect our waters? Have not fishermen in the past given their view on the deal? Has the Minister seen the poll carried out by Fishing News among the fishermen of Britain showing that 98 per cent. of the fishermen believe that the deal does not provide proper controls?

Mr. Robert Atkins: How do they know? It only came out yesterday.

Mr. Buchan: Yes, but is it not the case that the deal on which they polled was rather better than yesterday's deal and that 98 per cent. rejected it? Was it not shown that 96 per cent. felt that the Prime Minister had failed to keep her promises to provide
a further considerable area of preferential access"?
The right hon. Gentleman states that no concessions have been made in the agreement. In that case, what have the Danes got out of the agreement that now enables them


to agree to it? I wish to refer to the apparent concessions that have been made on the 20,000 tonnes of mackerel and the 2,000 tonnes of cod. Where is this cod coming from?

An Hon. Member: From the sea. [Laughter.]

Mr. Buchan: It is coming from Norwegian waters. The 7,000 fishermen who have lost jobs on Humberside over the last 10 years will not be laughing. The 2,000 tonnes of cod will be part of the cod quotas that will be reduced from the British section. Our proportion of that quota must be reduced.
Is the Minister aware that the worries of the fishermen require that at the end of the three years there must be a firm commitment that there will be no repetition of that allocation of cod? Will he also give a firm commitment that from now onwards there will be no Danish fishing off the west coast? I must remind the right hon. Gentleman, if he is not already aware of it, that Mr. Henning Grove, the Danish Fisheries Minister, said yesterday:
We are guaranteed 20,000 tonnes of mackerel for an indefinite period. If we cannot get this from third countries we will have to get this from somewhere else.
Is the Minister aware that "somewhere else" means British and Scottish waters? Will he give a firm commitment that that will not happen?
On restructuring, I take it that the £50 million agreed for the British industry is in addition to the allowance. Is the amount for British restructuring related to the amount of fish in British waters or to the quota that has been allocated? How on earth can we regard this as a good deal when we have two thirds of the fish in our waters and we have received only one third back? How can we regard the £140 million of restructuring as a particularly good deal if it is not based on an allocation of that type? Is it not, in the words of the Prime Minister, just a little—indeed, it is not even a little—of our own money back?
Finally, why did the right hon. Gentleman, of all people, end by saying:
I believe the agreements reached yesterday are good for Europe and good for Britain"?
As the fisheries Minister for Britain, I should have thought that he would put the priorities for Britain rather higher than the requirements of Europe as a whole. [HON. MEMBERS: "Sour grapes."] It is a bad deal, and next week we shall demonstrate in detail just how bad it is.

Mr. Walker: As someone who realises that in the coming 12 months there may be a general election, I shall be delighted if the Labour party votes against the agreement next week. Secondly, the hon. Gentleman's attitude is one of complete sour grapes on a deal which the fishing industry recognises gives it better quotas than its historic catch, better access arrangements than it has ever enjoyed, important structure arrangements, and important enforcement arrangements.
I express my gratitude again to the hon. Gentleman for mentioning the poll in Fishing News. I am delighted that he raised the matter. He said that 98 per cent. of the fishermen, the 70,000 readers of Fishing News, voted against this agreement and said that it was not in keeping with what the Prime Minister had promised. Fishing News conducted a poll, surrounded by immensely hostile arguments against the Government, with questions rigged to bring the most negative and nasty replies that it could.

It announced with a great flourish that it, with a readership of 70,000, had found that 98 per cent. of fishermen were against it.
I have to inform the House, from the very careful inquiries that I have made, that of the 70,000 readers of Fishing News, 69,880 did not vote. I am willing to accept that the "passionate hostility" of the 70,000 was expressed in the view of the 69,880 who, in spite of all the attempts by the Fishing News to generate hostility, decided sensibly that this agreement was a very good deal.
On the 2,000 tonnes of cod, I assure the hon. Gentleman that at the end of three years if any proposal is made for a continuation of those 2,000 tonnes of cod it will be open to whoever is the fisheries Minister responsible for this country to agree or disagree with such an allocation. Therefore, total power will be in the hands of future British Ministers as to whether that continues.
On west coast mackerel, I can only repeat what I said in my statement, that there is a clear declaration that only those with traditional fishing rights to the west coast mackerel will have them. There is a declaration by the Danish Government that they give up all rights to them. The only way in the next 20 years that any west coast mackerel could be caught by Danish fishermen would be if a British fisheries Minister decided that he would like to give Danish fishermen west coast mackerel. Apart from the hon. Gentleman, I cannot think of anyone who is likely to do that.
On the overall situation, this is an agreement. When the hon. Gentleman asks why I ended my statement by mentioning Europe and then Britain, I reply by saying that there is no better way of ending a statement than with the country that is to receive the most benefit from it.

Several Hon. Members: rose—

Mr. Speaker: Order. I hope that right hon. and hon. Members who are called will be brief and to the point, because I have a long list of right hon and hon. Members who hope to catch my eye in the main debate of the day.

Mr. J. Enoch Powell: Will the right hon. Gentleman publish the details, in whatever may be the most convenient form, of the new rights in the six-to-12 mile limit that have been secured in Irish waters?

Mr. Walker: Certainly. All the details and papers will be published and made available to the House of all the historic rights in the six-to-12 mile limit. On Northern Ireland, the rights that we have always enjoyed around the waters of the Irish Republic will continue; there is no problem there. As the right hon. Gentleman knows, that is of immense importance to Ulster fishermen.

Sir Walter Clegg: May I congratulate my right hon. Friend the Minister and his right hon. Friend the Minister of State on achieving this settlement, which will give a great deal of stability to the industry? Can he say what is the time scale of help from Europe for the reconstruction?

Mr. Walker: I am grateful to my right hon. Friend for his remarks. The time scale is three years.

Mr. J. Grimond: Is the Minister aware that I welcome his optimism about stocks in the North sea, but if there is over-fishing, will he confirm that presumably there are ways of amending the quotas and other arrangements? Secondly, is he aware that there is some dissatisfaction about the allocation of the


grants so far? Will he undertake that smaller boats are safeguarded when the new grants from the EC come forward?

Mr. Walker: On the last point, I think that the right hon. Gentleman is referring to the grants of national aids, on which there has been discussion. We discussed these matters with the industry, and we conducted the discussions as fairly as possible. It is not a European conception.
On the important subject of stocks, of course each year the TACs will be published, based on scientific evidence. Therefore, if there is a deterioration of the stock the quotas will decline in accordance with that. The important aspect, particularly for fishermen in the right hon. Gentleman's constituency, is that that area now has an arrangement of monitoring and licensing greater than anywhere in Europe, and I believe that it will ensure for fishermen in his constituency that future stocks will be secure.

Mr. Donald Stewart: Is it not an odd situation when the Minister describes as a satisfactory agreement better access for United Kingdom vessels into United Kingdom waters? How many United Kingdom fishermen does he think will fish in the continental areas that those countries have cleaned up themselves? Does he not think that it is a total sell-out when in my constituency the limits are down to six miles, whereas in a fisheries debate on 15 June 1978 many of his hon. Friends said that anything less than a 50-mile exclusive limit would be an abandonment of British interests?

Mr. Walker: In answer to the right hon. Gentleman's remarks about which fishermen are interested in the six-to-12 mile limit, I can well understand that he, particularly as a Scottish nationalist, has no particular interest in the fishermen of England, Wales or other parts of the United Kingdom. However, I suggest that if he talks, for example, to fishermen in Lowestoft, he will find that their interest in fishing in the six-to-12 mile limit off the German coast is of considerable importance. If he goes to Northern Ireland, he will find that interest there in fishing in the six-to-12 mile limit around the whole of the Irish Republic is of immense importance. So for the British fishing industry the positions that we have obtained for all time in the six-to-12 mile limits around other countries are of considerable importance.
On Scotland, one reason why the Scottish fishing leaders agreed to the agreement is that they know that this is a good agreement for access and dominance in Scottish waters.

Sir Michael Shaw: Is my right hon. Friend aware that the whole fishing industry owes a great debt to my right hon. Friend, and not only to him but to my right hon. Friend the Minister of State, who has worked with him so hard, and the whole team? This is a historic day. Will he confirm that the fishermen and the port authorities should now set about taking the greatest advantage of the long-term opportunities that have been presented by this argument?

Mr. Walker: I am grateful to my hon. Friend, and I am particularly grateful to him for mentioning my right hon. Friend the Minister of State. No one has worked harder and with greater skill than he. Altogether, in the past four years, apart from the many meetings of the Council of Fisheries Ministers, he and I have attended 47

bilateral meetings with other European Ministers, and a great part of anything that we have achieved is due to my right hon. Friend the Minister of State.
On what can now be done in terms of port facilities elsewhere, I believe that with stability assured for the next two decades there is much that can be done, partly on port arrangements, and, if I may say so, a great deal in the marketing of fish. I still believe that there is much to be done in that connection that can now be done, based on these firm quotas.

Mr. James Johnson: What the Minister has said today sounds almost too good to be true. Nevertheless, it would be petty of me not to compliment him on his hard work, particularly as his labours are supported by the three main fishermen's associations. How will the £140 million of Community funds be shared out between the distant water, middle water and inshore fleets? He must know better than I that Hull has, or had 10 years ago, the biggest deep-sea fishing fleet in Western Europe west of Murmansk. What is he doing to get money to the hard-hit and almost insolvent fishing port of Hull?

Mr. Walker: First, I am grateful to the hon. Gentleman for his kind remarks. Secondly, most of the money takes the form of percentage grants for various national measures. There are percentage grants for scrapping, restructuring, the modernisation of vessels and so on. Many of those apply to the fishing industry in Hull. I can only say that in the near future we shall have talks with the fishing industry. The British Trawler Federation, which is particularly important for Hull, has asked for talks with the Government in the near future on how to apply for those grants and put them into operation. We shall have to take into consideration the real difficulties that the long-distance fleet has had over the years as a result of the loss of Icelandic waters.

Sir Peter Mills: I congratulate my right hon. Friends the Secretary of State and the Minister of State and give them 10 out of 10. Will the Minister confirm that the agreement will mean more and better quality fish for our fishermen to fish for, which will benefit not only fishermen but the consumer? Will he also bear in mind the fact that it is important to proceed with aid for modernising the fleet so that there can be more economical fishing in the future, again to the benefit of the consumer?

Mr. Walker: These are, in my judgment, good quotas, above what has been caught in recent years. Quality will depend partly on the quality control imposed by the industry. However, to repeat what I said in my statement, one of the most fundamental points is that we at last have an agreement which can be enforced on all member countries. The real blow to the fishing industry, for example with herring, has been the disappearance or decline of stocks and it is important that in the coming decades stocks can be enhanced. I shall discuss with the leaders of the fishing industry how the British fleet can be adapted and advantage taken of the opportunities.

Mr. Robert Maclennan: Does the Minister agree that whether the new policy provides for a prosperous future for the fishing industry will depend both upon effective policing in other Community waters and upon a more effective marketing arrangement than has prevailed during the last 10 years


when incomes have been constantly threatened by imports from third countries enjoying concessionary arrangements? Will the Minister have urgent talks with the industry about that?

Mr. Walker: Marketing is of considerable importance. Obviously, changes have taken place over the past 12 months and exchange rates—which have had a heavy impact on the industry—will be of considerable importance. It was as a result of a regulation drafted by the Government that the Commission, for the first time in history, established an inspectorate with the right to board boats, look at documents and be on the quaysides to ensure that every country in Europe complied.

Mr. Robert Hughes: What country other than Denmark has been given a guaranteed quota for any species for which special arrangements will be made if the quota is not available? How much money will now go to the fishermen who will inevitably lose their jobs as a result of declining opportunities?

Mr. Walker: I am glad to say that during the past year under this Government the number of people employed in the fishing industry has increased and not declined. Therefore, that has not been a major problem, as it was, as the hon. Gentleman well knows, under the Labour Government when the major decline in the long-distance fleet took place. If the hon. Gentleman is well informed on these subjects, he will also know that the Labour Government considered the possibility of a redundancy payments scheme for fishermen in particular and decided against one.
There are no guaranteed quotas in this agreement for Denmark. The agreement for cod is for three years only and for mackerel there is a pledge that there will be an endeavour to obtain up to 20,000 tonnes of mackerel from the North Sea. There is no guarantee that that pledge can be fulfilled.

Mr. Robert Hughes: Oh.

Mr. Walker: No—no guarantee at all. Whoever has given the hon. Gentleman that information has misinformed him.

Mr. Albert McQuarrie: May I add my congratulations to my right hon. Friends the Secretary of State, the Minister of State and the Prime Minister, on the resolute stance that they have taken in negotiating this common fisheries policy, which is acceptable to British fishermen? Will the structure package be run by the Department of Agriculture, Fisheries and Food in Scotland or by the Sea Fish Industry Authority? If it is the latter, will he take steps to ensure that every application is treated with the utmost urgency?

Mr. Walker: Responsibility for the structure package will be with the Secretary of State for Scotland and myself. Responsibility for the detailed arrangements of grants will also partly rest with the Commission. In operating such schemes we shall see that they are conducted as speedily and efficiently as possible.

Mr. Kevin McNamara: Is the right hon. Gentleman aware that his statement will provide no solace whatever for the people employed in the long-distance fleet? He has given no details of what

catches ports such as Hull, Grimsby or Aberdeen can expect so that they can maintain their fleets and people in employment. Is he also aware that there will be considerable regret that he has not been able to state on this occasion what special measures will be taken to compensate fishermen from those ports whose present jobs are unlikely to be maintained, or to provide retraining?

Mr. Walker: I repeat that an agreement which gives Britain higher quotas than have been enjoyed for many years, and the likelihood that stocks will increase instead of decline, is unlikely to be a cause of unemployment but, rather, increases employment prospects.
As to the suggestion that there is no specific commitment to quotas or allocations to any particular port, I can only say that it is unlikely that if in the future there were to be a Labour Government they would decide on port-by-port quotas or allocations.

Mr. McNamara: They will.

Mr. Walker: I am interested to hear the hon. Gentleman say that they will. I am sure that that will be of immense interest to many fishermen in the United Kingdom.

Mr. Alex Pollock: Does my right hon. Friend accept that the settlement will be warmly welcomed by the fishing communities of the Moray firth? Does he also agree that it underlines the commitment, from the Prime Minster downwards, to a prosperous future for the inshore fleet and that the Government have kept faith with the fishing industry? Finally, does he agree that this package scotches the scare stories peddled so frequently by the Scottish National Party about foreign boats coming to fish up to our beaches in a free-for-all?

Mr. Walker: A number of politicians in various political parties predicted categorically that as from 1 January fishermen from all European countries would fish up to the beaches of the United Kingdom. As is known, only one gentleman attempted to do so, and he was fined £30,000 for the attempt. Under the agreement that we reached yesterday, nobody else is likely to do so.

Mr. John Home Robertson: Is the Minister aware that the 10 largest fishing vessels based in my constituency have been excluded from their traditional fishing grounds in the Norwegian sector since this dispute started and that their owners were greatly relieved when the dispute ended? Can he confirm that the extra allocation for Denmark will not be taken from waters of third countries, such as Norway, at the expense of Scottish fishermen?

Mr. Walker: One talks about extra allocations for Denmark, but the allocation of 2,000 tonnes of cod, with which the total cod stocks that British fishermen will enjoy compare favourably was brought from Norway in an area that is important to Norway for only a three-year period. The regulations for that allocation will exist for only three years, and were not made at the talks that have just taken place but were agreed with our fishing industry at the talks in December.

Mr. John Townend: May I add my congratulations to my right hon. Friends? There will be considerable relief in Bridlington that at last we have an agreement that our fishermen accept is the best on offer. Is there a possibility of European Community aid to the


trawler skippers who are part-owners who have been put in a difficult position in the past week because the other part-owners—a large Hull trawling firm—have gone into receivership?

Mr. Walker: If my hon. Friend brings to my attention the details about the part-owners, I shall consider them. The stocks, quotas and access proposals are better than the Hull and north-east coast fishermen have enjoyed for many years.

Several Hon. Members: rose—

Mr. Speaker: Order. If those hon. Members who have already risen are genuinely brief, I can call them all, because all except one have a constituency interest.

Mr. Hugh D. Brown: I suppose that I am the exception, as I come from Glasgow. I know that modesty is not one of the Minister's outstanding characteristics, but many of us recognise that, although the settlement is not very good, it is fair and reasonable in the light of all the circumstances. It ends the uncertainty. Does the Minister see a role for the fishermen's organisations in Britain and in other countries in the enforcement policies that could lead to better management and conservation policies?

Mr. Walker: Yes, Sir. In recent years our fishermen and those of other countries have come to realise that nothing is more important to their future than conservation. They can destroy their future by over-fishing at any time. That is why I am pleased that the leaders of the three main fishing organisations were more personally elated about at last having enforcement proposals than about almost any other issue. They were right to be so elated, because it is a fundamental facet of the future of the British fishing industry. In future, in both these and other measures, there will be close co-ordination with the fishing leaders.

Mr. David Myles: May I add my congratulations to my right hon. Friend on this agreement? I also voice my thanks and the thanks of the fishermen in Banffshire for the immense amount of work that he, my right hon. Friend the Minister of State, my right hon. Friend the Secretary of State for Scotland and my right hon. and noble Friend the Minister of State, Scottish Office have done in this and previous Parliaments to obtain such an agreement. Will he continue close consultations with the industry and urge the industry to stick together?

Mr. Walker: Yes, Sir. The link between my Ministry, the Secretary of State for Scotland and the industry is immensely important. Now that we have a secure future right into the next century, the Government and the industry must work together to ensure that full advantage is taken of that opportunity.

Mr. Gavin Strang: Now that a settlement has been reached on catches, will the Minister direct his attention to the processing side of the industry? Does he accept that hundreds of jobs could be created if he banned klondyking and provided effective financial support to the processing industry? Will he ask his right hon. Friend the Secretary of State for Scotland to reconsider his refusal to provide sufficient aid for the new fish processing development on the Western Isles?

Mr. Walker: I am sure that my right hon. Friend will take note of the hon. Gentleman's comment. As the hon.

Gentleman knows, much of the raw material for the fish processing industry is imported as opposed to being United Kingdom catch. There is nothing wrong with that. However, it is important that, as in agriculture, the processors and manufacturers have a close working relationship with the primary producers. I shall do all that I can to ensure a closer working relationship than has existed in the past.

Mr. Robert Hicks: Despite all that has been said, does my right hon. Friend recognise that inshore fishermen are still worried, because of experience, about the effectiveness of the enforcement regulations and policing that he mentioned, especially in the areas where historic rights will still apply? Can he assure the House that if any of those nations over-fish or infringe the conditions, immediate measures will be instigated by both the Commission and the Government to ensure that they are prevented from doing so in future? Devon and Cornwall are especially vulnerable in this respect.

Mr. Walker: I am grateful to my hon. Friend, who has taken such a close interest in the problems of fishermen in the south-west during the past four years. We shall take full advantage of our powers of enforcement in our territorial waters, to police and to monitor them, and we shall have the full approval and legal backing of the Commission. My hon. Friend will not have much to complain about in the way that we ensure that quotas and conservation measures are applied to all Member states.

Mr. Robert Banks: Is it not the case that these negotiations have been both long and difficult over very many years? While my right hon. Friend deserves great praise for reaching an agreement, is it not surprising that there is no recognition of the difficulties with which he has had to contend from the Opposition Front Bench?

Mr. Walker: I have no responsibility for the Opposition Front Bench. One problem with such negotiations was that we started in 1979 with eight countries that had an agreed policy against the interests of the United Kingdom, and with unsatisfactory quotas and no proposals on access. I am very pleased that we have obtained the understanding of other European countries and come out with such an agreement.

Mr. Hugh Dykes: In noting that the entire Labour party is furious that my right hon. Friend has concluded such a deal, except the hon. Member for Kingston upon Hull, West (Mr. Johnson) and the hon. Member for Glasgow, Provan (Mr. Brown), is my right hon. Friend aware that the money accruing under this agreement is twice what was estimated to be possible two years ago? In the wider context, however, does it not show once again what can be achieved by genuine co-operation and agreement in the Community?

Mr. Walker: I must praise my European colleagues who, having started with an agreed solution among eight of them against the major fishing country, during the years conceded the importance of better quotas and better access provision for the United Kingdom. Patient talking and the supply of information about the problems that were created by the original proposals has had that result. From a European point of view, the breeding grounds of many of the fish in our waters are in the territorial waters of other


European countries. Unless one has conservation policies for all European waters, it will be against the interests of all fishing industries.

Mr. Mark Hughes: I thank the Minister, the Secretary of State for Scotland and the Minister of State for the closeness with which they have kept in touch with the fishing industry during the negotiations of the past four years. It does him great credit. It is none the less not an especially good bargain in the end. Will he clear up what I trust was a slip of the tongue when he said that the 20,000 tonnes of mackerel were to be found in the North sea? If so, were they in the Norwegian or the Community sectors of the North sea?
Will the right hon. Gentleman also clear up precisely from where those 2,000 tonnes of North sea cod come? Are they paper fish or real fish? If they are real fish, at whose expense have they been allocated? Will he make it clear that his right hon. and learned Friend the Chancellor of the Exchequer will be forthcoming with the necessary United Kingdom money to trigger our share of the £140 million for restructuring? Will he ensure that we do not lose because of additionality requirements and that our fishing industry can take such benefits as remain from this deal?

Mr. Walker: On the latter point, obviously I have no right to speak for what Chancellors of the Exchequer will do in future. I can only say that in the three and a half years I have held this responsibility my right hon. and learned Friend the Chancellor of the Exchequer has agreed to levels of aid to the fishing industry massively in excess of what the previous Chancellor of the Exchequer agreed to. Therefore, I have no doubt at all that the attitude of this Government towards the fishing industry will remain the same.
Mackerel in the North sea is a joint Norwegian stock which operates in the whole of the North sea. The amount currently available is 20,000 tonnes. There is no certainty that it will always be available. If it is not available, the Commission has undertaken to consider what measures could help Denmark in such circumstances. They might be financial compensation measures; there is a whole range of measures. Whatever measures were decided on, it would be up to the British Minister at the time to decide whether or not they were acceptable to the United Kingdom.
The 2,000 tonnes of cod was part of the balance of stocks between Norway and the Community. To assist Denmark in coming to an agreement, the Commission asked Norway if it would for a three-year period make 2,000 tonnes of cod available, and it agreed to do so.

Official Report (Correction)

Mr. Robert Hughes: On a point of order, Mr. Speaker. I want to draw your attention to Hansard of 20 January, c. 497, covering exchanges between the Secretary of State for Transport on the Serpell committee report and the hon. Member for Moray and Nairm (Mr. Pollock), who asked for an assurance about the Aberdeen-Inverness line. I shall quote simply one sentence from the reply of the Secretary of State for Transport as recorded in Hansard:
I cannot stand here, and I have never sought to do so, and guarantee the future of the entire system for all time."—[Official Report, 20 January 1983; Vol. 35, c. 497.]
It is clear within my memory, and indeed from the press reports in almost every Scottish newspaper the following day, that the words used by the Secretary of State were that he could not guarantee every branch line. This is a matter of considerable importance as to the meaning which the Secretary of State attached to his answer. I understand that there is no dispute about the words used being incorrect in Hansard, but I should be obliged if you would ensure that the record is changed and make it clear that it was simply a mistake by the Hansard reporter.

Mr. Speaker: I am much obliged to the hon. Gentleman for giving me notice of his point of order, which has enabled me to make some inquiries. What he has said is correct. The necessary correction will be made in the Bound Volume. It was due simply to human error.

SCOTTISH AFFAIRS

Ordered,
That the matter of Housing in Scotland—Tenants' Participation, being a matter relating exclusively to Scotland, be referred to the Scottish Grand Committee for their consideration.
That the matter of Education: 16 to 18 year olds in Scotland, being a matter relating exclusively to Scotland, be referred to the Scottish Grand Committee for their consideration.—[Mr. Boscawen.]

People's Right to Fuel

Mr. Dennis Canavan: I beg to move,
That leave be given to bring in a Bill to prevent disconnection of domestic supplies of electricity and gas in cases of hardship; to introduce a statutory code of practice to protect people threatened with such disconnection; to eliminate fuel poverty; and for related purposes.
The disconnection of domestic supplies of gas and electricity is a nationwide problem affecting thousands of families, most of whom are on low incomes. We just need to look at the statistics concerning this matter for the 12-month period ending September 1982. During that period, 97,827 domestic electricity consumers had their supplies disconnected. The corresponding figure for gas consumers was 28,193. More up-to-date statistics indicate that today in Scotland alone over 3,000 people have no electricity supply in their homes because it has been cut off by one or other of the Scottish electricity boards. These figures are a national scandal.
It is even worse when we analyse the circumstances of the people involved. The Policy Studies Institute estimates that 90 per cent. of people who suffer disconnection are specifically mentioned as special categories in the existing code of practice. These special categories include recipients of supplementary benefit, family income supplement and unemployment benefit and old-age pensioners, the blind, the severely sick, the disabled and families with young children under the age of 11.
Recently, the case of a constituent who is a single parent with a baby in the house was brought to my attention. The electricity supply was cut off when she was out of the house. She returned to discover that she had been left with no supply for heating, lighting or cooking. On my intervention the electricity board reconnected the supply the same day, but the point is that the supply should never have been cut off.
I had details of another case, documented by Strathclyde regional council, of a landlord with four sub-tenants operating prepayment meters for their electricity supply. A bill of £770 had accrued, but the landlord could not be found. The supply was disconnected in breach of the code, leaving three pensioners and one student without lighting or electrical facilities. One pensioner died before the supply was reconnected on a Tuesday, following disconnection the previous Friday, when the attention of the South of Scotland Electricity Board was drawn to the fact that the code of practice is supposed to prevent the disconnection of tenants for debts incurred by the landlord.
It seems, therefore, that the existing voluntary code is inadequate and that deserving cases need statutory protection. My Bill proposes a statutory code of practice. Under no circumstances would disconnection be allowed by an electricity or gas board unless it had a court order. If I may draw a parallel with housing, no landlord or local authority may evict a tenant unless there is a court order. Why on earth should people not have the same kind of rights with regard to fuel supply?
The Bill also proposes that there should be statutory liaison between fuel boards and the Department of Health and Social Security and local authority social work departments to identify people with special needs who are faced with the possibility of disconnection and to give appropriate advice where necessary, for example, on

repayment by instalment. There is advice in the existing code for consultation, but I want statutory liaison, because there are cases where people have been disconnected because of a lack of adequate communication.
I also propose an extension of the existing fuel direct scheme. Only people receiving supplementary benefit are able to take advantage of the present scheme whereby, if they wish, their fuel can be paid for direct by deductions from their weekly benefits. This scheme should be extended to people receiving other kinds of DHSS benefit such as sickness benefit, invalidity benefit, unemployment benefit and so on. I should also like an extension of the provision of prepayment meters. At times, electricity boards, and possibly gas boards too, appear to be reluctant to install prepayment meters. Consumers should be given the right to have prepayment meters if they want them unless there are compelling circumstances, by reason of safety, for example, that would dictate otherwise.
My Bill also proposes to tackle one of the root causes of disconnection—fuel poverty—by introducing a fuel allowance for people threatened with hardship. At present, people in receipt of supplementary benefit may qualify, but not necessarily, for an additional heating allowance, but it is normally only £1·90 per week. What can anyone do with that? It would not buy even half a bag of coal. It would not go far towards heating a house by gas, electricity or any other means. The fuel allowance should be linked to the existing housing benefit to avoid the need for yet another means test and also to ensure at the same time that help goes to those most in need. The exact amount of the fuel allowance would depend on the financial and domestic circumstances of the consumer and also on the climate of the area of residence.
Recently, Professor Markus did a study which showed that it takes 20 per cent. more fuel to heat a house in Glasgow than to heat a comparable house in the south of England. The corresponding figure for Aberdeen is 30 per cent. That might partly explain why the number of disconnections per head of population in Scotland is greater than in the rest of the United Kingdom, but I suspect that this is also due partly to the draconian attitude of the South of Scotland Electricity Board.
Not long ago the Supplementary Benefits Commission inspectorate found that many pensioners were unduly restricting their heating because of worry about the cost. Another report found that 55 per cent. of people over the age of 65 had morning living-room temperatures of less than 61 deg F, which is the minimum specified for offices in the Offices, Shops and Railway Premises Act 1963. Such people, therefore, run the risk of hypothermia.
These reports are a sad reflection on our society and we ought to be thoroughly ashamed of the fact that such a situation is tolerated. I therefore ask the House to support my Bill, which is a charter to eliminate fuel poverty and is designed to stop unnecessary disconnections that cause misery, hardship and health risks to thousands of families.

Question put and agreed to.

Bill ordered to be brought in by Mr. Dennis Canavan, Mr. William McKelvey, Mr. Martin Flannery, Mr. David Winnick, Mr. Nigel Spearing, Mr. Norman Hogg, Mr. Ernie Ross, Mr. Stan Thorne, Mr. Gavin Strang, Mr. Dennis Skinner, Mr. Frank Allaun and Mr. Christopher Price.

PEOPLE'S RIGHT TO FUEL

Mr. Dennis Canavan: accordingly presented a Bill to prevent disconnection of domestic supplies of electricity and gas in cases of hardship; to introduce a statutory code of practice to protect people threatened with such disconnection; to eliminate fuel poverty; and for related purposes: And the same was read the First time, and ordered to be read a Second time upon Friday 25 February and to be printed. [Bill 66.]

Orders of the Day — Falkland Islands (Franks Report)

[SECOND DAY]

Order read for resuming adjourned debate on amendment to Question [25 January]:
That this House takes note of the Report of a Committee of Privy Counsellors on the Falkland Islands Review (Cmnd. 8787).—[The Prime Minister.]

Which amendment was to leave out from "House" to the end of the Question and to add instead thereof:
notes that the Report of the Falkland Islands Review confirmed the failure of Her Majesty's Government to give adequate priority to the Falkland Islands in its defence and foreign policy, its failure to consider the problem in Cabinet or the Defence Committee of Cabinet in the fifteen months before the invasion took place, and its failure to respond adequately to a risk of invasion which it knew to exist".—[Mr. Foot.]

Question again proposed, That the amendment be made.

Mr. Speaker: Before I call the Secretary of State for Foreign and Commonwealth Affairs, I should point out that in the interests of trying to preserve some of our courtesies I take a poor view of hon. or right hon. Members who, having spoken, conclude that the debate is over, leave the Chamber and we see them no more. That spoils the atmosphere in the Chamber.
I have not selected the amendment in the name of the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) to the proposed amendment.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Francis Pym): My own position in this debate is rather a special one. The Foreign and Commonwealth Office is one of the major players in the events under review. As Secretary of State I naturally have a strong interest in what is said in the report and in what has been said about these matters before and since its publication. At the same time, I am conscious that I became Foreign and Commonwealth Secretary immediately after the period covered by the review.
Let me say first that I very much welcome the report and greatly admire the way in which Lord Franks and his colleagues have discharged their responsibilities. Their very thorough dissection of a mass of oral and written evidence, all of which they saw or heard personally, is vastly impressive. The result is—or should be—very clear. The facts of a long and complicated story are lucidly and comprehensively set out, and the committee unanimously reached the conclusion that the invasion of the Falkland Islands on 2 April could not have been foreseen and could not have been prevented.
My own conclusion from that is simple. If, by some stroke of a magic wand, the Franks report could have been produced instantly on 3 April, I would not be Foreign and Commonwealth Secretary. As it is, I can only express my great pleasure and satisfaction that my distinguished predecessor, Lord Carrington, my right hon. Friend the Member for Spelthorne (Mr. Atkins) and my hon. Friend the Member for Shoreham (Mr. Luce), who resigned at the same time, have been totally exonerated.
Another aspect gives me equal pleasure and satisfaction. The Foreign and Commonwealth Office, and


the officials who serve in it at home and abroad, have been much criticised since the Argentine invasion of the Falklands. The Franks report sets out very clearly for those with eyes to see just how wide of the mark this criticism was. The point is one to which I attach great importance, and I shall return to it later.
It is not for me, nor indeed for the Government, to seek to justify word by word and argument by argument the report of a committee of Privy Councillors who were completely and quite properly independent of Government, but in the absence of compelling new evidence, which neither the Leader of the Opposition nor any other hon. Member produced yesterday, it is my view that the Franks report should be regarded as the authoritative and sensible answer to the questions that have been raised.
A committee of individuals who are nobody's fools and nobody's servants have looked at all the evidence without fear or favour and drawn their conclusions accordingly. I only wish I could be sure that those who seek to make party capital out of this or that remark in Franks, or who challenge the report's conclusions, had read it with a tenth of the care that went into its preparation. Having listened to the Leader of the Opposition yesterday, I can only conclude that he perhaps paid less attention to the report than it deserves and reached the most cursory of conclusions that he felt like plucking out of the air.
There may be others who, not having studied the evidence in detail, have been influenced in their judgment of these matters by what seems to be a very commonsensical point of view, that if something goes very wrong—and the invasion of the Falklands was very wrong indeed—someone must be to blame. I agree. But let us not be led by the all too common British habit of self-denigration to look in the wrong place.
Those to blame are not to be found in the British Government or to the British public service. According to Franks, what could have been done differently or done better in the light of the knowledge available at the time simply does not weigh heavily enough in the scale even to be be of great significance in the apportionment of blame.
The blame lies fairly and squarely on General Galtieri, on the Argentine junta and on their supporters in the armed forces. These are the men who decided to reject the path of legality and of negotiation. It was they who launched in secrecy an invasion of the Falkland Islands that the British Government could not have foreseen in time to prevent. Theirs is the guilt. There are no rules of morality, logic or common sense which require us to spread it further.
Perhaps I could just add one further thought before turning to look at the nature of the Falklands dispute. Lord Franks has done a great service by ensuring that discussion of the lead-up to the Argentine invasion can now focus on what actually happened and not on the many damaging myths that were allowed to gain such widespread currency before the report.
I commend annex A to the House, and I am glad to say that it was given good coverage by at least some of the press. Perhaps it is not too much to hope—perhaps it is—that the right lessons will be learnt from this experience for the future.
Many of the criticisms that have been made of Government policy and actions reflect an inadequate grasp of the nature of the dispute. There never was—nor can

there be—any simple solution. The fundamental contradiction has lain between the implacable Argentine insistence on a transfer of sovereignty, and the islanders' firm and consistent desire to retain unchanged their British way of life and administration. The geographical position of the islands has imposed inevitable constraints on Britain's ability to defend and support them against an unstable but militarily powerful neighbour. Over the years, the dilemma has become steadily more acute as the financial and economic realities have led to a contraction and concentration of our national resources.
As Franks makes clear, Governments of both parties have acknowledged this dilemma. They all—before the events of April 1982—reached the same conclusion: that the only proper and sensible way forward was to try to negotiate a settlement to the sovereignty dispute acceptable to all concerned.
All Governments were aware of the costs and difficulties of defending and sustaining the islands if negotiations were to break down. All Governments took the view that it was not only in the British interest, but in the long-term interest of the islanders themselves, that the problem should be solved and that the dangerous consequences of the dispute should be removed. It was the only way to avoid confrontation with Argentina, which would be difficult for Great Britain and tragic for the islanders. Suggestions of appeasement are nonsense. The Government and their predecessors were guided by one essential principle: that no settlement of the dispute could be contemplated that was not in accordance with the wishes of the Falkland Islanders and of this House. That has been and remains at the heart of our policy.
The Government took the view by 1980 that the most likely way of reconciling the Argentines' dominant interest in sovereignty and our interest in protecting the rights of the Falkland Islanders was to advance the leaseback option. We were well aware of the difficulties, but we thought it right to explore this way of resolving the complex factors of the Falklands equation. As hon. Members know only too well, the idea ran into difficulty, and Franks shows how and why. It has been suggested that, in the light of these difficulties over lease-back, the Government should have made a radical change of policy. This is what all this talk of Micawberism really boils down to.
The point can best be answered by a look at the options actually open to the Government at the time. The fundamental choice remained that which successive Governments had had to face: to negotiate with the Argentines; to reinforce the islands and support them in isolation from a hostile neighbour; or to surrender. The disadvantages of reinforcement and isolation were clear and compelling, as they had always been. There was no halfway house between that and negotiation. Reinforcement on any significant scale would have caused the Argentines to end negotiations and the services they provided. We concluded, as did our predecessors, that this would not be in the interest either of the islanders or of Great Britain.
The opposite course would have been to go over the heads of the islanders and to impose on them whatever solution we could reach with Argentina. That would have been to abandon the very principle that had been at the heart of British policy throughout the whole course of the dispute. It would not have been acceptable to the House or the country, and it would have been wrong.

Mr. Frank Hooley: There was a third possibility, which would have been to pray in aid the international machinery that exists precisely to resolve this kind of difficulty or, if we still have contempt for that machinery, to seek the advice and help of our allies. That was not done.

Mr. Pym: There seemed no need for that, and I recall no call for it at the time.
Would it, nevertheless, have been possible to embark on a public campaign to sell lease-back here and in the islands? It is a superficially attractive thought, but the risks were great. There has been much talk of signals to the Argentines about the Government's commitment to the Falklands. Such a public campaign would have been a very clear one. Its results could so easily have had the wrong effect on opinion both here and in Argentina. That, if it had happened, would have been a double own goal.
We took the third option—to hold fast to the principle that the islanders should not be pressured into accepting a status contrary to their wishes, but to keep the negotiations going, to avoid the very difficult consequences of breakdown and to keep open the prospect of both Argentine and islander opinion developing in a way that would allow a mutually acceptable settlement to be made. The consequences of failure were fully appreciated. Contingency plans were put in hand, but we took no overt action that could have precipitated the breakdown we were anxious to avoid.

Mr. Dick Douglas: What did the right hon. Gentleman think was in the minds of the Argentines as to what the negotiations were about?

Mr. Pym: There are plenty of records of the talks with the Argentines that went on throughout the period of the last Government and this one. A modus vivendi had to be found that would reconcile the dilemma inherent in the problem.
By the end of 1981 the Galtieri Government had taken over, and there were expectations of a more forceful Argentine approach. However, the new Government confirmed to us that their policy remained unchanged—that is of pursuing a settlement through negotiation. The talks that took place in February 1982 went better than expected.
By March the tension was none the less increasing. The reaction in Buenos Aires following the talks was worrying, though not unprecedented. It was clear that in future negotiations the Argentines would be looking for substantive and rapid progress on their terms and that we would have obvious difficulty in meeting them on this.
The Opposition argue that the Government should have taken action then to meet what they claim to have been an imminent Argentine resort to force. Their amendment accuses us of failing to respond adequately to a risk of invasion that we knew to exist. That is quite simply not true. The position was becoming more serious and the need for a full review by the Overseas and Defence Committee of the prospects and the policy options was foreseen. However, the evidence—set out in chapter 2 of the report—was that the Argentine Government continued to attach overriding importance to the establishment of their proposed negotiating mechanism. The talks were not dead. That is a vital point. The negotiating process was still in being and there was good evidence that the bellicose noises being made in Buenos Aires were intended to

influence it and not to break it off. The overwhelming weight of the evidence was that there was no consensus within the junta on a possible use of force, that direct Argentine pressures would follow, and not precede, a breakdown of the negotiations and that the crucial period would be the second, not the first, half of 1982.

Mr. George Cunningham: During the three weeks before the event there were pictures on British television screens of the riots in the streets in Argentina that transformed the political position there. There would have been temptations to launch an operation of this kind. The Foreign Office does not seem to have attached any significance to those events.

Mr. Pym: I am taking the House through the report in chronological order. With hindsight, it is easy to make the remarks that the hon. Gentleman has made. They do not find their place in the Franks report.
All this is gone into in very great detail in the report, which concludes that there was on balance no case for sending any sort of force to the south Atlantic, at least until three or four days before the Government actually did. The right hon. Member for Plymouth, Devonport (Dr. Owen) disagrees, not, I fear, out of logic, but because his contributions on this subject became firmly stuck in the 1977 groove long before the Franks committee reported.
It is important to be clear about this. The position that we foresaw on the evidence that we had—and it is all in the report—did not involve a threat of force by Argentina on a time scale that justified the covert despatch of a submarine in early March. The threat was assessed on the evidence as being significant in the second, not the first, half of 1982. The costs and operational penalties of maintaining a nuclear-powered submarine off the Falklands for what could have been a very lengthy period were considerable. We had no evidence in early March of a threat that warranted incurring these costs and penalties.
Let us not forget also that a leak of its despatch in early March might have precipitated a use of force by Argentina which we would have been in no position to resist. The right hon. Member for Devonport has said that he was surprised that the deployment in 1977 was kept secret. I might add that, when a submarine was despatched on 29 March, the fact did, indeed, soon become public.

Mr. Tam Dalyell: Will the Foreign Secretary—

Mr. Pym: If the hon. Gentleman will forgive me, I listened—and the House did—to his speech yesterday in silence.
Government policy before the invasion was proved wrong by events which could not have been foreseen. But it was based on a realistic assessment of the options and the dangers, in the light of all the circumstances and the evidence available at the time. The report amply bears this out.
Let me say a brief word about the Opposition amendment and the arguments—if that is the right word—put forward by the right hon. Member the Leader of the Opposition yesterday. Her Majesty's Government are accused of failing to give adequate priority to the Falklands issue. It is a charge that has great virtue for an Opposition. It says and means virtually nothing and therefore needs the minimum of supporting logic and argument. That is certainly what it has received.
The report sets out the facts against which one can judge what priority was attached to the issue, not only by this Government but by our predecessors. The report shows how policy was formulated, decided upon and then pursued within the guidelines agreed by the Government as a whole. I find it difficult, even with hindsight, to understand how it can reasonably be claimed that a greater priority should have been given to this matter. The Falklands and the dispute with Argentina were recognised as important and were treated as such.
The Leader of the Opposition also made a great deal of the absence of collective consideration by Ministers of the Falklands issue in 1981 and early 1982. The implicit and bureaucratic assumption in this criticism is that in the absence of discussion in formal meetings of the Cabinet or of the Overseas and Defence Committee individual Ministers are operating in a vacuum and that the exchange of information and comment necessary to the effective conduct of government simply stops. Anyone who has worked in government knows this to be nonsense. Right hon. Members on the Opposition Benches have whipped up over this issue something that has the substance and penetrating power of yesterday's shaving lather.
As the Franks report makes absolutely clear, when policy was being formulated and decisions taken—as was the case in 1980—the matter was extensively discussed in Cabinet and in the Overseas and Defence Committee. Later, when policy had been established and was being implemented, there was a constant flow of minutes from my predecessor to his colleagues in the Overseas and Defence Committee to keep them fully informed of developments. My noble Friend Lord Carrington's minutes on this issue were very clear and no one was in any doubt as to the facts as they unfolded. I received them myself, as Leader of the House at the time and as a member of the committee. Right hon. Members on the Opposition Benches who retain some recollection of government will know that such minutes leave all recipients free to comment and to call for a meeting if they think that collective discussion would be desirable.
There is no evidence here on which to justify a charge of collective neglect of the Falklands or governmental failure. The truth is that in their desperate search for material with which to embarrass this Government and serve their partisan purpose the Opposition have lost their grip on reality and sense.

Mr. Denis Healey: Surely the Foreign Secretary recalls the Franks committee in its report saying that it would have been advantageous to have precisely the sort of collective discussion that the Foreign Secretary now disparages. He will have to be a little less selective in quoting the report.

Mr. Pym: As I have explained, my predecessor kept all members of the Committee informed and advised by minute and I received such minutes myself. In addition to that, he had constant discussions, as my right hon. Friend the Prime Minister made clear, with the Prime Minister and the Secretary of State for Defence. Therefore, I think that the charge that was made of neglect is factually inaccurate.
Much has been made of the Prime Minister's request on 8 March that the paper which Lord Carrington proposed to put to OD should contain an account of contingency planning. My right hon. Friend has already dealt

effectively with the curious argument that this request could have been made only on the basis of some foreknowledge that has not found its way into the report. That is self-evident nonsense.
It is also wide of the mark to say, as did the right hon. Member for Devonport, that this request received no response and should have been followed up. The fact is, as the report sets out, that civil and military contingency papers had already been prepared in 1981. They were further developed and were ready as annexes to the paper when the Prime Minister's request was received.
The Franks report is about the past, and so therefore is this debate. But it is relevant to the future, and a number of right hon. and hon. Members have spoken about this. Some hon. Members on the Opposition Benches have done so in terms which I find surprising. There are those who ask why the judgment of successive Governments that it was right to pursue a negotiated settlement is now deemed to be overtaken.
The implication of this question is that nothing significant has changed. I freely acknowledge that ensuring a decent future for the Falkland Islanders will remain difficult—very difficult. But the difference between March 1982 and now is quite simple. The Argentines launched an unprovoked act of aggression against the Falkland Islanders. They gave no warning and refused all calls to withdraw. Their behaviour during the occupation was contemptible. Their attitude towards their own prisoners and their war dead was and is beyond the pale of civilised behaviour. Since they were thrown off the islands, they have not accepted that hostilities have ceased. They continue to talk about war.
Is it seriously argued that we should simply pick up the threads of negotiation as if nothing had happened? We did not want armed conflict with Argentina. The intense negotiations in the weeks that followed the invasion were testament to our wish to resolve the matter peacefully. When Argentina stubbornly prevented this we had no hestitation in doing what has to be done. We have no hesitation now in continuing to take whatever measures are necessary to safeguard the islanders' rights.

Mr. Gavin Strang: Will the Foreign Secretary at least confirm to the House that in the negotiations within the framework of the United Nations that took place immediately prior to the reinvasion by Britain the Argentine junta had agreed to a complete withdrawal of its forces from the islands, to an interim United Nations administration and to negotiations without prejudging the sovereignty issue? It is in the Government's own document.

Mr. Pym: What nonsense, and what an extraordinary word—reinvasion. It is an abuse of language.
This does not mean to say that we regard the present situation as immutable. We did not choose our present level of investment in the defence of the islanders and their way of life. It was forced upon us by Argentine aggression. I accept that it is costly to Britain and may prove disruptive of the traditional way of life of the islanders. But it is not a blind "fortress" policy. We are doing no more than a democratic Government, charged with the protection of the islanders against any obvious threat, have to do.
I have said many times that in the longer term it must be right for the islanders—it must be in their interests—to be able to live in a peaceful and beneficial relationship


with the mainland. But at present the conditions do not exist. We continue to be faced with an apparently unrepentant Argentina. The scars of war are all too fresh in the islands, both on the land and in the memories of the population. The shock must pass, the islands' economy must be restored and the routine of life resumed.
If any measure of normality is to be restored to the dispute, the first step must be a fundamental change in the Argentine attitude. It may be unrealistic to expect that they would give up their claim to sovereignty as they see it but it should not be unrealistic to expect that they will agree to a final cessation of hostilities and to renounce the use of force as a means for resolving the dispute.
Let us take one step at a time. I cannot predict what the situation will be either in the islands or in Argentina in a few years' time. Ours is a policy not of obduracy, but of prudent common sense and of regard for the islanders, for whom we are responsible and who have the right to determine their own future. It remains our duty to defend and to support them, and we shall.
I said at the outset that I would return to the criticisms that have been expressed of the Foreign and Commonwealth Office. As one who came to this office after the events under review, I believe that the House will concede my qualification both to judge and to speak of them. I am particularly grateful to Lord Franks and his colleagues for disposing in such categorical terms of the myth, to which the press, even some Members of this House and others have so often subscribed, that there was in some way a "Foreign Office" policy on the Falklands, based on some alleged appeasement and on disregard for the islanders, which has over the years been foisted by officials on a succession of passive and pliant Ministers. In paragraph 284 of his report, Lord Franks concludes that "this damaging allegation" is totally without foundation.
A study of the report as a whole illustrates just how baseless such assertions are. My right hon. Friend the Member for Spelthorne made his views very clear yesterday, for which I am grateful, as did my predecessor, in another place. I welcome this very much. Franks makes it clear that, throughout the course of the dispute, Foreign Office officials have done their job in a thoroughly professional way. They have put to each Government the facts of the situation and their analysis of these facts. They have presented the range of available policy recommendations. And Ministers, as is their task and responsibility, have decided that the right policy has been to pursue the path of negotiation. As the report again makes clear, officials have implemented this policy faithfully. In my view, they have done so with skill and dedication.
The Foreign Office made it clear from the outset that it welcomed the Franks inquiry and it has co-operated to the full. There has probably never been so thorough and exhaustive an examination of the handling by any Department of a single area of policy over so long a period, and the service has, by any standard, come out of it well. Over the course of the dispute its diplomatic skills have been effectively deployed in support of Government policy. The report categorically refutes the many fanciful allegations that have been levelled over the past nine months. It makes no major criticisms. It is only to be expected that, looking back on events, the committee should make observations on what other views might have

been reached or steps taken. We all have hindsight, but the report concludes that the view taken by the Foreign Office was reasonable in all the circumstances at that time.

Mr. Clive Soley: Does the Foreign Secretary accept that the criticism by many of us is not of the officers of the Foreign Office but of three Ministers—the Prime Minister, the Foreign Secretary and the Secretary of State for Defence? The allegation is that they did not take the warning seriously enough. May I adduce as evidence for that the statement in Hansard of 29 March when, in answer to an intervention by the hon. Member for Ashford (Mr. Speed) concerning expenditure on HMS Endurance and the Trident missile programme, the Secretary of State for Defence at that time replied:
I do not intend to get involved in a debate about the Falkland Islands now. These issues are too important"—
the Trident issue—
to be diverted into a discussion on HMS "Endurance".—[Official Report, 29 March 1982; Vol. 21, c. 27.]
It is the feeling that Ministers did not take the warning seriously enough that is worrying us.

Mr. Pym: I entirely accept that not only is it legitimate but entirely right that all Ministers should be criticised. That is the whole point of our parliamentary system. What I have been objecting to, and what I have resented so much throughout the whole of this period, is the fact that officials, who were not able to reply, were criticised and they have been shown by Franks to have been criticised unjustly.
The details of the report are naturally being studied carefully within the Foreign Office. Where there are lessons to be drawn, whether from the crisis itself or from the comments of the committee, or from this debate, I can assure the House that they will be learnt. There is no question of complacency. But I want to mention the broader context. The diplomatic service has all too often been the target for ill-informed criticism. It stays silent and gets on with the job. But to cast doubt on either the motives or the integrity of the service is unjustified and damaging to British interests. The service is engaged in actively promoting British policy, and in promoting and defending the national interest. It does so throughout the world in conditions often of discomfort and sometimes of danger. It is my experience, and that of others who have held this office, that it is a dedicated and professional body. Its reputation in the world stands high. It is a national asset for which we are much envied. To undermine it would be to damage our reputation and weaken our influence abroad—and thus to harm the national interest.
I should like also to say a word about the decision, to which my right hon. Friend the Prime Minister referred yesterday, to appoint as chairman of the Joint Intelligence Committee a full-time official of the Cabinet Office. The job of the JIC, which is part of the Cabinet Office and is supported by an assessments staff drawn from a number of Whitehall Departments, is to assess information from a wide range of sources. Secret intelligence is only a part of this. Much of the information is either unclassified or classified no more highly than is appropriate to the routine reporting of our posts abroad. The assessments staff works like other Government Departments. It is centralised in the Cabinet Office not because it depends on special techniques or special material, but because it has long been thought sensible for this crucial work to be done centrally on behalf of the Government as a whole.
The Joint Intelligence Committee has for many years been chaired by a senior official of the Foreign and Commonwealth Office, appointed with the approval of the Prime Minister, and responsible to the Prime Minister for his JIC duties. He has combined this work with his other Foreign Office responsibilities. The system has worked well in practice, but I fully support the view that the time has now come for the JIC to be chaired by an official working full-time in the Cabinet Office without the distraction of departmental duties. [Interruption.] Opposition Members may laugh. The arrangements that have existed hitherto have gone on for several decades and have worked in practice. Meanwhile events have moved on and the volume of work has increased. This decision is entirely right.
There has also been far too much ill-informed comment on the supposed failings of those responsible for intelligence. On this the Franks report speaks for itself, but I should like to add a word of tribute myself to all those involved in various ways with intelligence collection. Our tradition of not discussing these subjects in public should not allow us to underestimate the vital contribution which they make to our national security.

Mr. James Wellbeloved: rose—

Mr. Pym: If the hon. Member for Erith and Crayford (Mr. Wellbeloved) will forgive me, I have given way a great deal and I shall come to a conclusion shortly.
I welcome the Franks report particularly because it enables us to put behind us the recriminations that followed the Argentine invasion. I entirely agree with my right hon. Friend the Member for Yeovil (Mr. Peyton) who made this point so well yesterday in a notable speech. Historians will no doubt continue to argue over this or that point in the report, and to speculate about what might have happened if a different approach had been taken here or there. This may be a fruitful field for them and for those who want to dabble in it, whether to entertain or even to make mischief. But Franks has disposed of the argument that the Argentine invasion was in some curious way the fault not of the junta but of dilatory, negligent or ill-informed British Ministers and officials.
It was essential that there should be an objective inquiry into the events preceding the invasion, that this should be made public and that the House should debate its conclusions. Those conclusions are clear and have not been seriously challenged. It is now time to put them behind us and to move on. The world will not wait while we pore over the small print ad nauseam.
The year 1983 is a critical one in international affairs. The new Soviet leadership gives to East-West relations an added urgency and importance. Arms control talks over a wide range are entering a crucial phase. The search for peace in the Middle East has reached a particularly delicate stage. The agenda of the European Community remains a heavy one, and, not least among many other issues, we must tackle resolutely the question of a future for the Falkland Islands which will neither disguise the difficulties nor duck the principles involved.
This Government are tackling these formidable challenges with the support of the British people. They expect us to look forward to the future. That we are doing, with confidence and with resolution.

5 pm

Mr. Denis Healey: Whatever disagreements have been expressed so far in the debate, I think that there has been overwhelming agreement—indeed, if the Prime Minister does not mind my using the word, consensus—among Members in this place and in another place on two important issues. The first issue is that our armed forces performed with brilliant professionalism and courage in an operation which the chiefs of staff, we now know, judged to be highly precarious, and which in spite of the quality of our forces might have been a tragic defeat if all the Argentine bombs which struck our ships had exploded.
The second issue on which there can be no substantial dispute is that it was General Galtieri who started the conflict with an act of unprovoked aggression which was rightly condemned by the United Nations Security Council. That is as certain as the fact that Hitler started the second world war with an unprovoked attack on Poland.
The Franks committee was set up to examine events preceding the Argentine attack and to ascertain whether the British Government might have prevented it, as many believed the British and French Governments before the second world war might have prevented the attack on Poland. The Prime Minister rightly said yesterday:
the real cause of the conflict was … the gross misjudgment of a military junta".—[Official Report, 25 January 1983; Vol. 35, c. 804.]
I believe that that is true and that "misjudgment" is the seminal word. This was confirmed by General Galtieri's interview, a report of which appeared in The Times on 3 June while the conflict was in its final stages. He said to the Italian journalist, Oriana Fallaci:
I'll tell you that though an English reaction was considered a possibility, we did not see it as a probability. Personally, I judged it scarcely possible and totally improbable. In any case, I never expected such a disproportionate answer.
There is no reason to believe that when General Galtieri used those words he was misrepresenting his own views.
With respect to Lord Carrington, there is no reason to believe that the man was mad. We must all be impressed by a speech in another place yesterday in which the noble Lord gave a reasonable answer to many of the criticisms made of him. If in the course of a distinguished career as Foreign Secretary he made any mistakes, I think that they stem from his belief that anyone who did not share his urbane, moderate and civilised approach to diplomacy was totally unreasonable or even certifiable. That is what he said about General Galtieri a week ago. He said:
No one assumed or even thought that we were dealing with a lunatic … You can't go about your business as a Foreign Secretary if you assume that everyone you are dealing with is a lunatic.
Whatever General Galtieri was, he was not a lunatic. He was vain, complacent, stupid and badly informed, but there are other political leaders of whom the same might be said. Certainly he was far less irrational than Hitler or Mussolini, and he does not compare remotely with leaders such as General Idi Amin, Colonel Gaddafi or the Ayatolla Khomeini, with whom modern Foreign Secretaries have had and still have to deal. Foreign Secretaries have to make judgments about how such people may behave and how they may induce them to behave in ways that are more conducive to our interests. I believe that it was easier to make such judgments about General Galtieri than about many other Heads of Government and Heads of State.
That was the central problem which the Franks committee was set up to explore—whether there was something which the British Government might have done to influence General Galtieri to behave more sensibly and to ensure that he did not make the crucial misjudgment about how we would react if he attacked the islands, on which his decision to invade was based.
It will not do for the Foreign Secretary to suggest that my right hon. Friend the Leader of the Opposition and the right hon. Member for Plymouth, Devonport (Dr. Owen), who believe that things might have gone better and that steps might have been taken to influence General Galtieri to take different action, are acting for party reasons. That view, and other views which have been expressed in the House in that direction, have been stated by the Financial Times and The Guardian and by leading writers in The Times and The Daily Telegraph. There is a case for the Government to answer. It is deployed in the Franks report and I do not believe that in central areas we have had answers yet.
The Prime Minister naturally placed overriding importance on the last paragraph of the Franks report. I feel that that paragraph does not exonerate the Government from the real charge against it. It concentrates on whether the Government could have foreseen that General Galtieri would invade the islands on 2 April rather than at some other time. As this was decided only the day beforehand, the Government could not have foreseen it. If they could not have foreseen it, they could not at that stage have prevented it. However, I found the careful choice of questions and the even more careful choice of words used by the Franks committee in its report to answer the questions both perverse and disingenuous. As someone observed in a newspaper this morning, it is rather like someone saying that it cannot be predicted that it will snow on Christmas day. That does not mean that it is sensible to go around from November onwards without an overcoat in one's wardrobe and without anti-freeze in the radiator.
The real question that the Government have to answer—the report gives material on which reasonable men can make a judgment—is whether by different actions the Government could have led General Galtieri to regard invasion of the islands as something too dangerous to contemplate.
As the report rightly says, no one can be certain on this matter. In the end General Galtieri invaded and the Government acted as they did. If they had acted differently, no one can be certain what the situation might have been. I believe that the report provides enough evidence to suggest that the Government's sins of omission and commission were serious enough to raise the possibility that different actions could have led General Galtieri to reject invasion. We can learn important lessons of general application from studying the report, one of which the Government have already decided to implement. I refer to the appointment of an independent chairman to the JIC, which I think the Prime Minister will recall I recommended to her when we debated the matter last summer.
There are also some lessons of specific application to the policies that we still need to lead the Falkland islanders from a situation which has destroyed their peaceful, normal way of life. They are no longer a rural community

such as those in the Hebrides. They are now outnumbered five to one by a military garrison whose only purpose is to defend them.
Another matter on which there has been surprisingly broad consensus in the debate so far in both Houses is that we have finished up with the worst of all worlds. We are stuck with a Fortress Falklands policy, which all Governments thought was the least desirable, at a cost so far of £2 million per head of the adult Falkland islanders. The cost is falling entirely on the British taxpayer.
The first conclusion of the Franks report is that the Government did not give the Falkland Islands priority in the collective consideration that they deserved, given the enormous political, military and economic cost of getting it wrong. The cost of getting it wrong is already £2,000 million. As Lord Belstead, Minister of State, Foreign and Commonwealth Office told us a week ago in another place, that sum has been spent or committed. There is still no explanation—the Foreign Secretary did not attempt to meet the point—why the Overseas and Defence Committee of Cabinet did not meet for 15 months before the invasion to consider the issue. According to the report, there was no formal consideration of the problem outside the Foreign Office for 15 months before the invasion took place. As the Prime Minister told us yesterday, the OD met 18 times in 1981 alone, but it did not discuss the Falklands.
I find it difficult to credit that the very Latin American section of the intelligence community, which was concerned only with affairs in Latin America, met 18 times in the nine months before the invasion without once considering the threat to the Falklands. That was in spite of the fact that the latest full JIC assessment, which was made in 1981, was that there might be a sudden attack on the Falkland Islands if Argentina considered that negotiations were getting nowhere. As we all know, the Government had decided as far back as October 1981 that it would be impossible to negotiate to any meaningful end.
It will not do for the Foreign Secretary to suggest that these are partial and artificial considerations being advanced by an Opposition who are trying to score party points. In paragraph 292, the Franks report says:
We cannot say what the outcome of a meeting of the Defence Committee might have been, or whether the course of events would have been altered if it had met in September 1981; but, in our view, it could have been advantageous, and fully in line with Whitehall practice, for Ministers to have reviewed collectively at that time, or in the months immediately ahead, the current negotiating position; the implications of the conflict between the attitudes of the Islanders and the aims of the Junta; and the longer-term policy options in relation to the dispute.
In a report, in the drafting of which my ex-private secretary Sir Patrick Nairne had a hand, those are quite tough words. For the Foreign Secretary to believe that that criticism of the Government does not even deserve consideration is utterly unjustified.
It is the Prime Minister herself who must carry the major responsibility for not giving the Falkland Islands problem the importance it deserved in terms of consideration in Cabinet. She must also carry a special responsibility because it was she who said in this House more than a year ago when she rejected the demand to keep HMS Endurance in the area:
other claims on the defence budget should have greater priority."—[Official Report, 9 February 1982; Vol. 17, c. 857.]
It would have cost £3 million to keep HMS Endurance in the area, out of a total defence budget for the year of more than £12,000 million. For the Prime Minister to suggest in public that there was no way, in a budget of more than


£12,000 million, that £3 million could be found to keep HMS Endurance on without damaging interests of greater priority was the clearest signal to the Argentine Government that we did not consider it to be an important matter. I do not believe that in the light of those facts the Government can seriously claim that they gave the Falklands adequate priority.
I shall now deal with whether we might have persuaded General Galtieri out of invasion if we had sent different signals to him. This ground was well traversed in this House and the other place yesterday in some extremely penetrating speeches, especially from Opposition Members here and from both sides of the House in the other place. What has emerged is that the prime responsibility for any errors of omission or commission does not lie with Foreign Office officials or with the Foreign Secretary. Indeed, I noticed today that the Foreign Secretary is trying to turn the Franks report to the advantage of the Foreign Office, and in the same way as the Royal Navy tried to turn the Falklands war to its advantage. I do not blame him for that. He has suffered too much from some of his neighbours recently in that regard.
A real responsibility lies with other Departments of Government—it is itemised in the Franks report—and especially with the Secretary of State for Defence and the Prime Minister. Responsibility also lies with the Home Secretary because the decision to strip of British citizenship the very islanders on whom our claim to sovereignty rests, and whose families have been there for at least four generations, was extraordinarily ill judged. Moreover, it has still not been put right. There is a private Member's Bill on the subject that awaits time which the Government will not give it.

Mr. Michael Shersby: rose—

Mr. Healey: The Government have taken that line on the Falkland Islands because of the repercussions involved. If they do something for the Falkland Islanders, they must do the same for the citizens of Gibraltar and Hong Kong.

Mr. Shersby: rose—

Mr. Healey: Perhaps the hon. Gentleman will let me finish this point. In committing herself to the Fortress Falklands policy that now prevails, the Prime Minister has taken no account of its repercussions on Gibraltar and Hong Kong. If she believes that she can treat the Falkland Islanders as a special case in this instance, there is no reason why she should not do the same and have done the same in the case of British citizenship.

Mr. Shersby: Is the right hon. Gentleman aware that I am the hon. Member who intends to promote the Bill to which he has referred? I voted against the Government throughout the passage of the British Nationality Bill and did my best to secure British citizenship for the Falkland Islanders, but the Opposition voted the other way. The Opposition did not support British citizenship for the Falkland Islanders, so it is no good the right hon. Gentleman trying to pretend otherwise. He should ask his hon. Friend the Member for Lambeth, Central (Mr. Tilley) and his right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) about that. Moreover, the Division lists will show how they voted.

Mr. Healey: My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley), through the osmotic process from which hon. Members on the Front Benches are able to benefit, has told me that the hon. Member for Uxbridge (Mr. Shersby) did not vote against citizenship for the Falkland Islanders alone but against British citizenship for all the categories that I have mentioned.
My point is that, in view of the threat to the Falklands that successive Governments have reckoned to exist, there was a case for making an exception for the Falkland Islanders, despite the repercussions. There is no doubt—Franks makes the point—that the Government's decision to strip the islanders of British citizenship was seen as another sign of the extremely low priority that the Government gave the problem.

Mr. Shersby: Will the right hon. Gentleman give way?

Mr. Healey: No, I have dealt with that point.

Mr. J. Enoch Powell: Will the right hon. Gentleman give way?

Mr. Healey: No, with respect to the right hon. Gentleman, I should like to deal with another point. I have given way a great deal. [HON. MEMBERS: "Oh".] Very well, I shall give way to the right hon. Member for Down, South (Mr. Powell) whose views on this subject and others never cease to startle me.

Mr. Powell: As one who both moved and voted for amendments on the Bill to confer British citizenship on those inhabitants of the Falkland Islands who did not possess it, I assure the right hon. Gentleman that nothing happened in that Bill which stripped those islanders of any status in this country which they had under the existing law. The right hon. Gentleman is mistaken.

Mr. Healey: I am afraid that my right hon. Friend the Member for Sparkbrook, whom I was invited to consult on that matter, tells me that the right hon. Gentleman is again mistaken.
The major responsibility for the errors of omission that led General Galtieri to believe that he could invade the islands with impunity lies with the Prime Minister and the Secretary of State for Defence. They decided, against the advice of the Foreign Office, the Falkland Islanders, our ambassador in Argentina and a substantial part of the House—both Conservative and Opposition Back Benches—to remove HMS Endurance, which was a symbol of our defence commitment. More important than that, they decided to get rid of those ships on which any effective military reaction to invasion must depend—HMS Invincible and two assault ships.
We could not have carried out the reconquest of the islands as in the end we did if it had not been for those decisions which were supported by the Prime Minister and the Secretary of State for Defence, but which were opposed by the Foreign Secretary.
In yesterday's debate in the other place, in as clear and cogent a speech as he always makes, Lord Carver said that HMS Endurance was the casualty of in-fighting in Whitehall. But it is the Prime Minister's responsibility to deal with in-fighting in Whitehall. The Foreign Office was right and so were the Falkland Islanders, the ambassador


and my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) to say that that would be seen in Argentina as a symbol of disinterest—and so it was.
The central charge is that once the Government had retreated into what our ambassador called Micawberism, and had decided to string along the Argentines in talks without any clear objective, the risk of invasion without warning became real. It had been predicted by the last JIC report in 1981 and it was expected by the Government by the end of 1982. It is from that point—the last 18 months of the story—that the fecklessness of the Government passes belief.
There was no ministerial discussion of the problem. It emerges clearly between the lines of the Franks report, and from what the Foreign Secretary said in interviews, that the Foreign Secretary saw no point in having a meeting of OD unless he could first detach the Prime Minister from the Secretary of State for Defence. He sent a whole series of minutes in an attempt to change her mind. She did not do so, and in the court of the empress, if the empress is against one, there is no point in the grand vizier calling a meeting of the Privy Council.
A disturbing remark was made by Sir Michael Palliser, the former permanent secretary at the Foreign Office, in a television discussion involving himself, me, and the right hon. Member for Down, South a few days ago. Justifying the fact that there had not been any discussion, Sir Michael said:
On … March 18th or 19th, events began in South Georgia, and I think it was that which actually helped to trigger an Argentine invasion, which would otherwise, more probably, have taken place later—not least because it would have been a much better time, to do it later, from their point of view, for obvious reasons".
The "obvious reasons" were the withdrawal of Endurance, the disappearance of Invincible to the Australian navy and the withdrawal of two assault carriers.
Sir Michael was interrupted by the right hon. Member for Down, South, in a state of some excitment, who said:
…would have taken place.
Sir Michael said that they thought there would be a slow escalation of pressure from the Argentine Government. He added:
And at that point it is quite clear to me that Lord Carrington would have had to say to his colleagues: We now have the option either in effect giving way to Argentina—which is politically, morally and in every other way unacceptable—or of sending a proper force down there to defend that place. And I think that that was probably what was in his mind, in waiting for the psychological moment to do it.
If we are to believe Sir Michael's account of the position a year ago, the Foreign Secretary saw no opportunity to change the Prime Minister's mind unless the Argentines first escalated the conflict. He hoped at that stage to achieve some collective consideration and a shift in the Prime Minister's position. The question we must ask ourselves is, supposing the invasion had arisen not in March but in September or October, what precisely did the Foreign Secretary plan to do about it? By that time we would have been unable to assemble the task force that the chiefs of staff judged necessary. That was made clear by Admiral Sandy Woodward in interviews not long ago. If we had waited until the end of the year, when the Foreign Office expected an invasion, we would have been unable to resist it. Certainly we would not have had a force

capable of repossessing the islands or of defeating a full-scale attack. And those are the only purposes for which the Government apparently considered it sensible to send a force.
Another point deserves consideration. A full-scale assault in the sense of a simultaneous attack by all arms of the Argentine forces was never the real problem. When the Argentines finally invaded the islands, they did so with a comparatively small force of marines. Yet at that time we did not even have sufficient explosives on the islands to crater the airfield. The result was that the Argentines used the intervening weeks before the task force arrived to build up a formidable force of arms on the islands. Our Harrier and Vulcan bombers—which were apparently sent there only to give Bomber Command a part of the action—wholly failed to deny the Argentines the use of the airstrip, even when the battle was engaged.
As a result, we faced a difficult and dangerous position when we had to reconquer the islands. It might have gone wrong. The chiefs of staff warned the Prime Minister that it would at best be a precarious affair, and so it proved. The Prime Minister misunderstood the nature of deterrence. She appeared to agree with me when I said in a debate last summer that an ounce of deterrence was worth a ton of defence. To deter an antagonist, we need a force sufficient to convince him that he will in any case suffer substantial losses if he attacks, with a significant risk of escalation. That could have been provided much more simply than the Government pretend.
The best witness of that is Lord Admiral Hill-Norton, who said last week, with all the authority of an ex-chief of defence staff and also ex-naval attaché in Buenos Aires:
leaving aside the tragic loss of 255 lives and nearly 800 wounded on our side, while it might have cost possibly £10 million to deter that aggression, it has cost £2 or £3 billion to defeat it."—[Official Report, House of Lords, 17 January 1983; Vol. 437, c. 1208.]
That is the burden of the charge against the Government, which they have not made any attempt to meet in all the debates over many months.
Late in the day, after the landings on South Georgia, the Government at last began to act. Because there had been no prodding from the Prime Minister, it took the chiefs of staff from shortly after 3 March until 26 March to give the Prime Minister advice. She told us yesterday that she received that advice on 26 March. She did then act. I shall quote what the right hon. Lady said in yesterday's debate because it nowhere emerges in the report. She said:
On 29 March we sent a nuclear submarine, and on 31 March we sent seven warships from off Gibraltar. They were not to act on their own. They were to await the full aircraft carrier force. In view of the chiefs of staff's advice that a deterrent force would require an aircraft carrier, and that to win would require a much bigger force, I was anxious that we should not put people in jeopardy. We should have sufficient forces to protect them the whole time."—[Official Report, 25 January 1983; Vol. 39, c. 804.]
What does that imply? Is it that the Government had decided to send a task force—rightly so—on Monday of the week in which the invasion took place on the Friday?

The Prime Minister (Mrs. Margaret Thatcher): No.

Mr. Healey: I quoted the Prime Minister's words.

The Prime Minister: It was decided to send the nuclear submarine on the Monday.

Mr. Healey: The Prime Minister said that she sent seven warships from off Gibraltar on the Wednesday,


which were to be part of a larger force and should not act on their own. It made no sense to send them unless they were to be part of a larger force that she was planning to send. She was right to do so.

The Prime Minister: The right hon. Gentleman will remember that it was on the Wednesday night that we received the raw intelligence and on the Wednesday night that we decided to alert preparations for a task force. As ships were exercising off Gibraltar, we decided to send them on their way. They were not to act on their own. I think that that is mentioned in the Franks report. They would have had no function unless there had later been a task force. The decision to send a task force was taken by Cabinet.

Mr. Healey: The right hon. Lady confirms my point. I quoted what she had said, and she has just confirmed it.
The one part of the Franks report that is totally inadequate is paragraph 333, a "final warning to Argentina". The first warning was given on 23 March by the hon. Member for Shoreham (Mr. Luce). All that he was able to say—it was almost an invitation to invasion at that time—was that it was
the duty of this Government and of any British Government to defend and support the islanders to the best of their ability."—[Official Report, 23 March 1982; Vol. 20, c. 799.]
As we had no ability at that time, and the Argentines knew it, that was not a very formidable warning.
The next step was taken on 25 March, when the British ambassador warned the Foreign Secretary of Argentina
that Britain was committed to the defence of … sovereignty in South Georgia as elsewhere.
That was not terribly impressive either. Then, when
a threat to the Falkland Islands themselves was perceived, the Prime Minister contacted President Reagan on 31 March
By that time, the Prime Minister had had the raw intelligence and had, according to what she said yesterday, sent seven warships from off Gibraltar to be part of a larger force. She took no steps whatever to warn the Argentine Government that they would face such opposition if they attacked. She made no contact with them at all. She merely rang her friend, President Reagan, who at some stage telephoned President Galtieri. I believe that it took him 24 hours to make that telephone call. It did not take place until 1 April, although that is not stated in the report.
The President
stated forcefully that action against the Falklands would be regarded by the British as a casus belli.
It was not wise to entrust President Reagan with that phrase. We do not know whether, at his end of the telephone 8,000 miles away, President Galtieri understood it. As, at that time, the Foreign Secretary had decided to send a task force, why on earth did the right hon. Lady not tell Galtieri so? If she had told him, it is overwhelmingly probable that, at the last minute, he would have ordered his ships not to invade.
That is the main burden of the case against the Government for fecklessness and irresponsibility in dealing with a threat that they knew to exist. Now we are stuck with the Fortress Falklands policy because there is no alternative, and everyone agrees that it is the worst of all worlds. There is no chance of the Falkland Islanders restoring even the semblance of normal peaceful life while they have to accept a garrison on such a scale. As Lord Shackleton pointed out, the islanders have no chance of leading a normal life unless, somehow, normal relations with the Latin American mainland can be restored.
The Government's position on Fortress Falklands is somewhat obscure. The Prime Minister was unequivocal and absolute about it, as she always is when she knows what she thinks. Fortress Falklands is the policy; there is no alternative. The Foreign Secretary said in an interview on Friday, however, that Fortress Falklands was the wrong way to describe the situation, which is really like our situation in Britain. We have some forces to defend us, and so do the islanders. Our forces in this country, however, do not outnumber us by four to one.
The most interesting remark, which I fully applaud, was made by Lord Belstead in a debate in another place on 17 January. He said that the Government had no desire to keep a permanent military base in the south Atlantic. He suggested that, once Argentina agreed to renounce the use of force in pursuit of sovereignty, Britain would be able to reduce its forces. What he went on to say was wise, and has been said by many people in the debate He said:
I do not think that this is the time or the occasion on which to speculate about future political developments. The islanders themselves will have their own views, but at present they still need time to recover from the physical and psychological after effects of the Argentine invasion.
He went on to say, using words that we often use when we are in government:
We remain fully committed to consulting them in due course and to respecting their own wishes about their political future."—[Official Report, House of Lords, 17 January 1983; Vol. 437, c. 1267.]
Those are the words that the right hon. Member for Devonport recommended to the Government, and which were rejected by the Prime Minister in an exchange yesterday. There was no mention of paramountcy. Lord Belstead said that we were fully committed
to consulting them in due course and to respecting their own wishes about their political future.
That phrase was always used by the previous Labour Government when they discussed those matters. It was hardened up to such an extent that it made negotiation extremely difficult over the past few years. None of us can pretend that the time is right for a new attempt to solve this problem by negotiation, but the time must come. When it comes—

The Prime Minister: The right hon. Gentleman has made some remarks about paramountcy. The right hon. Member for Stepney and Poplar (Mr. Shore) in the famous cross-examination on 2 December 1980, speaking of the wishes of the Falkland Islanders, said to the Minister of State:
Their wishes are surely not just 'guidance' to the British Government. Surely, they must be of paramount importance. Has the hon. Gentleman made that absolutely clear to the Argentine Government?"—[Official Report, 2 December 1980; Vol. 995, c. 129.]

Mr. Healey: The right hon. Lady is well aware that I do not share the views of my right hon. Friend on that matter. Nor did the previous Labour Government. However, the Prime Minister must not seek to evade her responsibilities about what her deputy Foreign Secretary said in another place eight days ago. That is an important matter. The right hon. Member for Devonport made that clear in his exchange with the Prime Minister yesterday.
What worries us most of all about this affair and what emerges most clearly from a study of the report and of the facts that I have put before the House is that on this, as on other issues, the right hon. Lady switches from feckless


Micawberism to an inflexible and bellicose rigidity and a rejection of consensus, which it is the aim of diplomacy to achieve.
That was well described by Lord Carrington in yesterday's debate when he talked about people who
carry chauvinism and insularity to such a degree that one almost feels they disapprove of anyone in the Foreign Office talking to a foreigner.
The Foreign Secretary is familiar with that. Lord Carrington went on to say:
But the alternative to negotiation is confrontation. In general, confrontation is not in the interests of the country, is extremely expensive and very often in the long run leads to war."—[Official Report, House of Lords, 25 January 1983; Vol. 438, c. 160–1.]
The style and temperament of the Prime Minister is incompatible with the successful handling of our domestic policies. It is a total disaster when it is applied to foreign affairs.

Mr. Richard Luce: When I made my resignation speech on 7 April I told the House that I had approached this issue with the greatest of humility. I do so in the same vein on this occasion.
Having listened to the right hon. Member for Leeds, East (Mr. Healey), I can say that he is a man with many qualities, but I think that even he would agree that the quality of humility is not high on his list. It seems extraordinary, if he were trying to be objective, that he did not refer to the fact that the Franks report contains considerable criticisms of the previous Government and their inaction over the occupation of Southern Thule. At the least, he might in passing have referred to it.
It is necessary, and I am sure that the House agrees, to show humility on this occasion, not least because since the early debates on 3 and 7 April, 255 brave men have died for the Falklanders, for our country, for justice and freedom. Moreover, we have now in front of us, the object of this debate, an objective report produced by Lord Franks and his team.
Like many others, I asked for this inquiry in April of last year, and I did so for three reasons. First, I thought that it was important to establish the truth. Secondly, I thought that it was essential to examine the damaging assertions made over the course of the few weeks after the invasion. Thirdly, I thought that it was important to learn lessons from what had happened, and lessons are there to be learnt.
Anyone who, like myself, asked for the inquiry and went on to welcome the composition of that inquiry—which included the right hon. Member for Leeds, South (Mr. Rees) and Lord Lever—and then turns round and criticises the report, calling it a "whitewash" or "dismal", has a heavy responsibility to justify his views to the House, or his motives will be open to suspicion. For my part, I accept and welcome the report. There are useful lessons to be learnt from it.
I accept my share of responsibility for the decisions which I helped to make when I was Minister of State. We all, including myself, have prejudices, but the value of this occasion is to try to approach this subject objectively. It is futile to have a sterile debate in which we seek to apportion blame to each other. It is an unattractive aspect of our adversarial system that there is an almost

instinctive, perhaps even an unconscious, demonstration of what I can only call the "Oklahoma" syndrome—continually playing the gramophone record to the tune of
Anything you can do I can do better,
becomes tedious and boring for the public.
I prefer and admire the humble position of the right hon. Member for Plymouth, Devonport (Dr. Owen) who said at the opening of his speech:
There but for the grace of God go I."—[Official Report, 25 January 1983; Vol. 35, c. 815.]
None of us could, by any stretch of the imagination, call ourselves whiter than white. We all make mistakes, but, to judge from some of the remarks from the Labour Benches, the Labour party never made any mistakes. The right hon. Member for Devonport deserves to be listened to.
The truth is, as The Guardian put it on 19 January, that "if there are few villains, there are precious few heroes either." That is a fair summary of the background of the 15 years leading up to the invasion on 2 April. We now have the Franks report, and its two main conclusions, which it unanimously reached, that the invasion could not have been foreseen and that no blame or criticism is attached to the present Government for the aggression.
There are criticisms of successive Governments and there are lessons to be learnt. It would be extraordinary if there were not. The question that has been asked in the House and elsewhere is, why in these circumstances should Lord Carrington, my right hon. Friend the Member for Spelthorne (Mr. Atkins) and myself have resigned on 5 April?
I explain once again to the House the reasons for our resignation. I hardly need explain to the House that there was, in the first week of April, a grave crisis. It was essential for the country to unite behind the Prime Minister and the Government. The Foreign and Commonwealth Office was the lead Department in this affair and the Ministers in that office were the target for a great deal of criticism. It was essential for the Prime Minister to lead the country with a team of Ministers at the Foreign Office who were not open to accusations about responsibility for the invasion or the inevitable recriminations that arose from that.
It was for that reason that the three of us decided that the honourable course was to resign. I believe that honour is not something to be despised. To this day I believe that that was the right decision to take, even though in Lord Carrington we lost one of our finest Foreign Secretaries in this century.
One of the aspects that has emerged during the course of the debate involves myself and the New York talks, and the phase immediately afterwards. To simplify it, the question has been posed, should our judgment at that time have led us to take precautionary measures? The right hon. Member for Devonport posed that question, as did the hon. Member for Merthyr Tydfil (Mr. Rowlands), although we are now dealing with this matter of judgment on a basis of hypothesis.
The hon. Member for Merthyr Tydfil spoke yesterday, and I listened to him carefully but decided not to interrupt, because that would have been discourteous in the circumstances. I have heard him make many impressive speeches. However, his speech yesterday was below his normal standards and he did not do justice to himself.
In the 1960s, the 1970s and the early 1980s we faced three options, which are set out in the report. The first was the policy which my right hon. Friend the Foreign Secretary described as reinforcement and isolation. The second was talks on non-sovereignty, which would soon have led to the first option. The third was to talk seriously on all aspects of the problem, including sovereignty.
I am firm in the view that successive Governments were right to see whether it was possible to find a modus vivendi so that the islanders and the people of Argentina could reconcile their interests if at all possible, subject always to the essential safeguard of which each Government always spoke—the consent of Parliament and of the islanders. That was the right policy.
It is against that background that I remind the House that no Government had decided to incur the substantial costs of establishing a permanent deterrent force, although there remained always a risk of military action, certainly, as my right hon. Friend the Prime Minister set out so clearly yesterday, from 1973 onwards. Each Government, one by one, thought that it was worth taking the risk and hoping that by keeping the dialogue going and searching for a modus vivendi it would not be necessary to resort to force or to send a permament deterrent force there. Of course, the dispatch of ships there temporarily could be helpful. It is not, however, a permament deterrent force. Indeed, one might argue that the Argentines, if they wanted to take action, would simply wait for the ships to withdraw, provided, of course, that they knew of the existence of the ships in the first place.
There have been successive dictatorships in Argentina. As my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) will rightly remind us, dictatorships are, or tend to be, unpredictable. Successive Governments have had the continuous problem of predicting the unpredictable, knowing that at no time did they ever have, of their own decision, a permanent defence force there. That is a difficult thing to do at any time.
There has been reference to the New York talks. The purpose of those talks was to discuss an Argentine proposal to establish a negotiating commission, which Argentina proposed should complete its work by the end of 1982. The principle of establishing a negotiating commission was acceptable to us. We accepted it, subject to Cabinet approval, in New York.
As the House will understand, we had considerable difficulties over the timing proposals of the Argentine Government. To have completed talks under the negotiating commission on all aspects of the problem by the end of 1982 would have been counterproductive and not at all sensible. We therefore reached a compromise which, I think, both sides thought acceptable. Paragraphs 294 and 296 set out, I believe reasonably fairly, the context in which we went into those talks.
After the talks came the unilateral communiqué—it did not reject everything that had been agreed, but was much harsher than the communiqué and the agreement in New York—and the harsh press criticisms, which were clearly designed, from the point of view of Argentina, to put extra pressure on us to get ahead with a negotiating commission. Naturally, we sought, through our ambassador, reassurances from Dr. Costa Mendez that Argentina intended to continue negotiations. That reassurance we gained.
Much attention has been focused on what happened on 5 March at the meeting which I attended and which was

chaired by Lord Carrington. Of course, as the Franks report displays, we examined ruthlessly every aspect of the problem. We came to the conclusion that Argentina would give the negotiating commission a try—although we would have to test the sincerity of Costa Mendez in view of the developments of the previous two or three days—but that if no progress was made there was a likelihood that Argentina would resort to the United Nations, that it might undertake a Spanish type blockade, as seen over Gibraltar, and that during 1982 it might decide on adventurist exercises of a military nature.
At that time, as the Franks report sets out, together with the background, we did not advise the Prime Minister that we should deploy ships. Paragraphs 327, 328, 329 and 330 give the background and show the sharp distinction that Lord Franks draws between the conditions in 1977, which were far more dangerous, according to the evidence, than the conditions at the end of February and in early March. Against that background, with hindsight, we all wish that we had sent ships in earlier months. However, if we strip hindsight from reality, which was the purpose of the Franks report, and look at the circumstances of the time, we see that the Franks report concludes that the actions that we took cannot be regarded as unreasonable. I have to say to the House, in all honesty, looking at the circumstances and stripping away hindsight, that I do not believe—Lord Carrington feels the same—that we would have done anything different.
What, therefore, are the lessons? I feel certain that there are lessons to be learnt on the intelligence side. When we are faced with problems of serious national interest, it is essential that the intelligence services should be in the best possible shape. I welcome the decision of my right hon. Friend the Prime Minister to appoint an independent chairman for that purpose.
Secondly, I should like to touch on the relations between the Government and Parliament. Those who suggest that Parliament should have been better educated by Ministers, of whatever Government, over the years talk in rather patronising terms. I believe, however, that successive Governments could have been more vigorous in inviting Parliament to face more sharply the options that confronted us. Indeed, one might speculate—

Mr. Andrew Faulds: Does the hon. Gentleman not agree that the problems, so far as the House is concerned, are twofold? First, there is a staggering degree of ignorance about South America in all quarters of the House. Secondly, the problem is that no Government had the guts to direct British public attention to the need for the problem to be solved rationally.

Mr. Luce: The hon. Gentleman states, perhaps in a different way, what I am trying to say. I was intending to say that had we had the present kind of Select Committee system in the 1970s—a Select Committee that looked sharply at the options—there would not necessarily have been a different story, but at least there might have been greater understanding between the Government and Parliament. I welcome the fact that today we have a Select Committee that is looking at this problem, albeit late in the day.
The final lesson on which I wish to dwell relates to the Foreign and Commonwealth Office. There have been allegations that officials ran the policy and that they did not put the national interest first. I recall many allegations


being made that the Foreign Office was rotten to the core with appeasement. Here, if anything, is an example of irresponsibility without power. Ministers, at all times, Labour and Conservative, have, as the evidence to Franks shows, been in charge and have taken policy decisions, as should be the case. They have been accountable to Parliament. Secondly, from my experience, Foreign and Commonwealth Office officials do put the national interest first.
British diplomacy, once praised, believe it or not, by General de Gaulle as the finest in the world, is designed to further British foreign policy and the national interest. We do not live in a cocoon in Britain. We have to live in the real world that surrounds us. We have to work with our friends. We have to talk and negotiate where necessary in order to reduce the risk of confrontation and war and to create stability. I would have thought that the efforts of our diplomats, on the instructions of the Government, to get resolution 502 passed was a supreme example of this.
I come now to the future. The very act of invasion, to my mind, has closed the prospect of talks with Argentina for the foreseeable future. But the problem will not go away. Even with a democratic Argentine Government, which we must hope will emerge one day, the very nature of the problem will not, in my view, change much. We have to begin to look to the longer term. There has to be the possibility of a broad approach and a framework in the southern Atlantic which, I believe, makes sense, particularly if Antarctica is included, which will permit common interests to be identified and where strategic interests can be reviewed in the widest possible sense. To that extent, I welcome the establishment of a Select Committee to look into these problems.
The House and the country will not forget how, against all the odds, 28,000 men and women responded to the outstanding leadership of my right hon. Friend the Prime Minister and showed the guts and the determination of which all can be justly proud. Nor should we forget that it was Galtieri and the junta who misjudged us and invaded. The lesson to the world, let alone to Argentina, is "Do not underestimate the British."

6 pm

Mr. James Callaghan: The hon. Member for Shoreham (Mr. Luce) is a man who speaks with conviction and sincerity, and the House will always listen to someone who has the courage to resign when he thinks that it is in the interests of the country, or his Department, to do so. He comes from a family with a long record of public service, and I do not dispute in any way the conviction with which he put forward his views this afternoon.
Nevertheless, I must make two comments. First, the hon. Gentleman is one of the few people who comes out well in the Franks report:
We acknowledge the skill with which Mr. Luce and Foreign and Commonwealth Office officials handled the formal talks".
There are not many bouquets like that. He can be happy about that.
Secondly, I was sorry to hear him say that even if he had another 5 March he would not have advised sending ships. With respect, that was a misjudgment. It is not enough to say that it was a hindsight and we can all look at it with hindsight. The two contradictory statements—his

own communiqué, followed by the unilateral denunciation from Argentina—were enough, in my judgment, to set the alarm bells ringing.

Mr. Luce: I simply want to say that, stripping hindsight from reality, I cannot in all honesty say that I would have made any other judgment.

Mr. Callaghan: I understand the hon. Gentleman. All that I can say in response is what I feel about the number of decisions that were taken at that time.
In reading the report I have tried to put myself into the position of officials, the Foreign Secretary and the Prime Minister. In my opinion, they relied too much on evidence coming from the Joint Intelligence Committee, and did not use their political nous enough. I feel very strongly that there was too much recourse at that time to what was being said and the careful analyses that were being put forward—which, I might add, differ in hardly any particular over a period of years. It is for civil servants to advise, it is for the JIC to interpret the documents, and for politicians to decide.
I in no way seek to make offensive points here, but the judgment was wrong. The Government had all the evidence, and the evidence pointed in different directions. The JIC's evidence pointed in favour of a distant invasion. The newspapers in Argentina pointed in the direction of an early invasion. Our ambassador in Buenos Aires talked to some of the newspaper editors and came to the conclusion that they were officially inspired. He reported that. Apparently, it was in the telegrams. The JIC's evidence must always be given great consideration and weight, but one must not rely just on the Red Book. The Prime Minister and the Foreign Secretary sit where they sit because they have the political judgment and they have to make it. In my opinion, that is the case against which the Prime Minister does not have sufficient defence.
I shall cut out much of my speech, because the indictment of my right hon. Friend the Member for Leeds, East (Mr. Healey) was so powerful that there is no need for me to go over it again, and I shall not do so. However, I want to take up one or two points.
I take up immediately the point that was made by the hon. Member for Shoreham about Southern Thule. Here is an instance where Franks has got it wrong. I challenge Franks directly. Franks telescoped the story so much that it is inaccurate in detail and misleading in its conclusion. I shall demonstrate that. If hon. Members wish to refer to the matter, it is in paragraphs 52–56 of the report.
We all know now that Southern Thule is an uninhabited, remote and desolate island some 1,500 miles to the south-east of the Falkland Islands. It has not been inhabited, as far as I know, within living memory. On 4 January 1977, I saw a telegram which reported that there was an Argentine presence with tents and huts, flying the Argentine flag. At the same time I asked for an immediate report. The next day, having asked for an immediate report, the then Foreign Secretary summoned the chargé d'affaires of Argentina to the Foreign Office to explain the presence on Southern Thule. Action was taken immediately on the matter. The British ambassador, again under the instructions of the right hon. Gentleman, lodged a formal protest in Argentina. The Foreign Minister of Argentina said that the station was purely scientific, and he gave an assurance that the station would be withdrawn.
I ask hon. Gentlemen to read paragraphs 52–56. Do they see there any mention of the facts that the station was withdrawn? There is none. In fact, in March 1977 the station was withdrawn. Paragraph 57 says:
On 14 February 1977 … a Buenos Aires weekly political news-sheet, published an article about the occupation of an 'island' (Southern Thule) in the South Sandwich Islands".
It was occupied then. It had been occupied for about six or eight weeks.
Argentina maintained a presence there and it was still in occupation at the time of the invasion of the Falkland Islands".

Mrs. Elaine Kellett-Bowman: rose—

Mr. Callaghan: Perhaps the hon. Lady will allow me to finish the point, then I shall gladly give way.
There is an illusion there. In fact, the Argentines left Southern Thule in March 1977, and we did not know that they had returned, because they did not return again, until February 1978. There was bad faith. They went back. However, no one could judge from that account that the representations had been successful and that the Argentines had withdrawn and then, in bad faith, gone back again.
I am discussing the inaccuracies of the Franks report. For 338 paragraphs the Franks report painted a splendid picture, delineating the light and shade. The glowing colours came out. When Franks got to paragraph 339, he got fed up with the canvas that he was painting and chucked a bucket of whitewash over it.
I come back to the telescoped and therefore misleading account. The Defence and Overseas Policy Committee of the Labour Government met when we heard the information. We decided to reconfirm our sovereignty but at that stage not to send a task force. Would hon. Members have done anything different? I am sure that the Foreign Secretary would not have done anything different. He would not have sent a task force to recover the island. But, we said, in reconfirming sovereignty, we will endeavour to engage the Argentines again on the possibility of joint scientific activities without prejudice to our sovereignty. Was that a sensible way of looking at the matter? I say this to the hon. Member for Shoreham, because I dare say that these facts are not known to him, and certainly they are not known to many other people. The Argentines replied that they were very interested. They thought that there was a case for a joint scientific expedition. Perhaps, they added, we could have joint studies to quantify oil and fishing prospects around the dependencies.
The conclusion of that second occupation—none of which is referred to here—was that the then Foreign Secretary reported to me on 13 March 1979 that following the discussions that he and his officials had had
there is agreement in principle. Argentina accept that their station on Thule will have no implications for sovereignty.
That was the correct way to deal with the matter. I am not attacking the Government at this point. That was the correct way to handle the problems of the small uninhabited islands—keep the temperature down and do not get boxed in to the point of having to surrender or to fight.
The Prime Minister presumably agrees with me because she took no action on Southern Thule for the first three years and she was right to do so. I am not disagreeing with her. But that only illustrates the nature of the problem. By starting in 1965—a fair time to start because by that time the United Nations resolution had been put

through—Franks neglects earlier history. There is an earlier history to Southern Thule and it concerns the hon. Member for Shoreham.
In 1955 the Argentines established a base hut on Thule. They carried out radio transmissions. Protests were made but the Argentines remained. The Conservative Government made no attempt to remove them. I am not complaining; I am saying that no attempt was made to remove them. However, they evacuated eventually because of nearby volcanic activity. When last year the Prime Minister scorned us for not attempting to remove the Argentines from Southern Thule, saying that she had had to do it, did she know any of that history? I do not think she did. What is more, I do not think that Lord Franks did either.

Mr. Luce: I apologise for intervening twice, but whatever the rights and wrongs of the actions taken by successive Governments on this issue over the years, the main assertion that has been made is that the way in which we approached the Southern Thule problem was that it was one signal amongst many over several years to the Argentines that the British lacked resolution. That is the only point I was seeking to make and it seems wrong that Labour Members should not take it into account.

Mr. Callaghan: I take the hon. Gentleman's point. It really is a small matter—[Interruption.] It is small in relation to the problem but it is big because it illustrates what has to be done and how successive Governments tackled it. It is interesting from that point of view. I would not have spent so long on it had the hon. Gentleman not challenged us. However, having the facts, I might as well give them to the House.
The Government did not assess the Argentines' actions correctly. They therefore failed to respond in time. That is a matter of fact; it is not a matter of opinion. We can say whether they were culpable in failing to assess them, but they did. The second point is that the Argentine Government's mistake was that they believed that they would have a walkover. They were surprised at the strength of the British response, as both the hon. Member for Shoreham and my right hon. Friend the Member for Leeds, East have said.
What would have given the Argentines reason for thinking that there would be a walkover? Southern Thule was a long time before but were there other, more proximate, reasons? I think there were. Paragraph 123 of the Franks report says:
On 19 January 1982 the Governor of the Falkland Islands submitted his Annual Review for 1981. He noted that the Islanders' relations with both Britain and Argentina had deteriorated during the year.
What were their suspicions? Their suspicions have already been mentioned. They were the refusal to grant British citizenship to Falkland Islanders in the British Nationality Bill, the announcement of the withdrawal of HMS Endurance, the financial cuts in the British Antarctic survey, and—note this—especially the threatened closure of its base at Grytviken in South Georgia. They were also concerned about the fact that there had been six overflights by Argentine air force aircraft without response—whether with protest Franks does not say.
That was what the Falkland Islanders were thinking. If they were thinking that, were not the Argentines thinking the same? They knew that they had overflown. They knew that we were threatening to close the Grytviken base. They


knew that we were proposing to withdraw HMS Endurance and they knew that we were not giving citizenship to the Falkland Islanders. What conclusion were they to draw at that time?
Those are some of the reasons why Galtieri made this blunder—of course, it was more than a blunder, it was a crime. Those are some of the reasons why he thought he would have a walkover and that all we would do was protest to the United Nations and get a resolution and that would be the end of it. I am not saying this without some background knowledge. However, he mistook the resolution of the House and the resolution, determination and stamina of the Prime Minister.
The British people have made up their minds about two issues. First, they think that the Prime Minister, at a time when some of her colleagues were faltering, saw the job through when there were difficult and great losses. I can well imagine the mental strain that she was under. The British people understand that. They support and applaud her. But they also believe—this is where I wish that she would go part of the way—that she could have made more effort and that she did not do her job properly before the moment when the war broke. My right hon. Friend the Member for Leeds, East has demonstrated that and I shall give only one more illustration of it.
I promised the Prime Minister that I would deal with the question of 1977. That has now been well rehearsed by my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands). In contrast to the hon. Member for Shoreham, I thought that he made a splendid speech and I congratulate him on it. He has been so bustling, aggressive and enthusiastic about it that there is no need for me to say much more about the question that I asked. I said in Cabinet that if we were asked—we are all betraying Cabinet secrets—to explain the presence of the force that was sent, we should say that it was being sent for normal exercise purposes.
When the hon. Member for Shoreham made his report on 30 March I asked a long question, which I shall not bore the House by reading. I summarise it. I asked the Minister whether when it became known that, without fuss or publicity, Britain had sent ships to the Falklands a diplomatic solution followed. I have reconsidered my question and I do not want to alter it. I stand by what I said. In paragraph 66 the Franks report goes on to say:
We have found no evidence that the Argentine Government ever came to know of its"—
the fleet's—
existence … The Argentine threat receded, and it was agreed after the talks that the naval force could be withdrawn".
Both those statements are accurate. I offered no evidence to the Franks committee on the matter. I discussed it with the Franks committee, and I decided, and it of course agreed, that I should not offer evidence on it. However, both statements are accurate and I am not ready to go further today than what I said at that time.
The major issue at that time—I know that some hon. Members are trying to push this as though it was the only thing that mattered—is the point that was made by my hon. Friend the Member for Merthyr Tydfil—that we were there. We were in a position—this is also in the Cabinet minutes—to buttress our negotiations were they to break down. We were not able to repel the full assault but we

were there and able to do so. That was the point about 1977 and I hope that the House will understand that I cannot go any further at this time.

Mr. Ivor Stanbrook: The right hon. Gentleman is being very tantalising. Did the Argentine authorities know or not?

Mr. Callaghan: I am not going any further into that matter.
In view of another question that has been raised I should say that the Chief of the Defence Staff told us that the force that it was proposed to send was appropriate. That is the difference between 1977 and 1982. November 1977 was only one incident, but there were many others before and after. Towards the end of 1978, the Government whom I had the honour to head wished to demonstrate to the Falkland Islanders our continued concern and our willingness to defend them. We also wished to demonstrate our concern to Argentina. We took the very important decision that there should be a programme of regular visits by Royal Navy ships to the Falkland Islands, to begin in April of the following year, 1979.
As part of the deployment we understood from the Ministry of Defence that some ships would be visiting Brazil at that time and that they would go on from there to the Falklands. What was the purpose of those periodical visits and the presence of those ships? In the words of the minute, the visits would be
essential visual evidence of Her Majesty's Government commitment to defend our dependent territories.
In April 1979, we were all engaged in other affairs. I do not know, and I have not inquired, whether a ship was dispatched as it should have been under the direction of the Cabinet minute of April 1979. On 3 May, the Prime Minister took over. The decision had been made to make periodic and regular visits. I ask the right hon. Lady: what happened to the policy? Were ships sent, and, if so, on how many occasions?
If there was an announcement that Endurance was to be withdrawn—such an announcement was made—nothing would have more clearly signalled to Argentina our commitment to the Falkland Islands than regular, periodic visits by Royal Navy ships to Port Stanley. Perhaps the Prime Minister was not told about the policy. Perhaps when my back was turned the Ministry of Defence went back into its bad old ways. I do not know. There is no reason why the Prime Minister should not have reached a similar decision after she had reflected on the matter. Had she done so, that signal would have offset nearly every other signal that suggested that we were weakening in our determination. There was strong evidence in the summer of 1981 that the Argentine Government were turning up the heat. Paragraph 97 of the Franks report clearly shows the Argentine Government's view.
I return to the point about Ministers not discussing the matter collectively. Lord Carrington dismissed the problem, as I would expect someone from another place to do, by saying that one cannot carry on government by continuous committee. It is a great pity that Lord Carrington never had the discipline of the House of Commons. Since the days of the great Lord Salisbury, every time we have had a Foreign Secretary in the House of Lords it has always been a disaster in the end. That is a lesson that we should learn. We should have the Foreign


Secretary in this Chamber. We should have made clear to him our view of the Falkland problem and he might have had to attend a few meetings.
Lord Carrington sent a long minute to the Prime Minister on 14 September 1981, which stated:
The risk of ultimately becoming involved in a military confrontation could not be discounted … Supplying and defending the Islands would be both difficult and costly.
It was important to realise that if we were heading in that direction in August and September 1981.
At the same time, the chiefs of staff—not under the directions of the Prime Minister, the Foreign Secretary or the Ministry of Defence but of their own volition—made what they called a short politico-military assessment of the United Kingdom's ability to respond militarily. They completed the assessment on 14 September 1981. It noted that Argentina had built up some of the most efficient armed forces in South America. They concluded that the British military response would primarily have to be a naval one.
It is extraordinary that those two papers—the minute from the Foreign Secretary stating that we were perhaps heading for a military confrontation, followed by a paper from the chiefs of staff on 14 September, which they approved, pointing out the difficulties that we would have—were not considered sufficient to call a meeting for Ministers to consider the problem collectively.
I feel ashamed that the Government acted in such a half-hearted way. It is absurd to think that such a matter should not demand a meeting. Lord Carrington could have asked for the meeting. All of us have a different way of conducting our affairs, but I say to the Prime Minister that if I had been in that position and seen those papers I should have called such a meeting. We would have had one, and we should have tried to work out what we would do faced with the possibility of an attack on the Falklands.
On 14 September the chiefs of staff memorandum with its politico-military assessment was ignored. Paragraph 113 of the Franks report states:
In the period that the Chiefs of Staff paper was being prepared there was some anxiety … about the lack of detailed contingency plans for the protection of the Falkland Islands themselves and of the Royal Marine platoon there. … The Assistant Chief of the Defence Staff (Operations) reported that"—
to the commander-in-chief's committee, not to Ministers—
pending consideration of the Chiefs of Staff paper by the Defence Committee, there was no enthusiasm in the Ministry of Defence for detailed contingency planning.
He reported that in September 1981. Between then and February 1982, neither of those papers, which were of the utmost significance, was considered by either the Defence Committee or the Cabinet. That is a disgrace and a dereliction of duty on the part of those responsible. Apparently the reason why there was no urgency was lethargy. Ministers are open to severe criticism about that.
As my right hon. Friend the Member for Leeds, East said, that omission had consequences later. When the fatal day arrived—described in paragraph 333—and we could see that an invasion was imminent, the Prime Minister contacted President Reagan and asked him to make it clear to the Argentine Government that the Government could not acquiesce in action against the Falklands. Could one imagine anything more feeble than those words, "could not acquiesce"? I am glad that President Reagan was entrusted with his Latin phrase and stepped it up a bit.
The excuse that the right hon. Lady gave is that she wanted to know, but could not without the collective advice of the chiefs of staff, whether an operation to retake the islands was feasible. Nor, she said, was it possible to go further without the approval of the Cabinet. Why did she not get the approval of the Cabinet earlier? Why did she wait until then in order to get these things put right? Those matters should have been prepared, and in her heart the right hon. Lady knows it.
When it seems that we are looking for scapegoats, more charity would be extended to the right hon. Lady if she could ever bring herself to admit that sometimes she was wrong. She had a most difficult decision to take. Everyone involved did, and I do not envy them their task. I agree with the right hon. Member for Devonport. The Government cannot escape the fact that they got it wrong, but they could have considered the problem much more carefully.
That damning sentence—about wishing to know whether an operation was feasible—makes the case against the Prime Minister for failing to exercise sufficient control and oversight over what was happening within her own Cabinet. Because of a lack of vigilance and foresight in the months leading up to the invasion the Government are guilty of an error of judgment in preparing to meet an act of aggression. It is impossible for anyone to escape that conclusion, except, apparently, Lord Franks. The Government can argue that the official intelligence that reached them did not warn them strongly enough, but they are not eunuchs. I shall not develop the point. The Government should have applied the political touch to the matter and made their own decisions. I cannot think of a previous Prime Minister who would not have done so, whether it be Sir Anthony Eden, Churchill, or Clement Attlee. They would all have been much more conscious of the problems that would be faced once the islands were taken and we had to set out to retake them.
I disagree with those—and agree entirely with the hon. Member for Shoreham—who have criticised the policy of successive Governments or the attitude of Foreign Office officials. Those of us who had to study the problems did all that we could and did the best job that we could in that position. That includes the right hon. Lady's Government up to the middle of 1981, when there was an attack of Micawberism and apparently no initiatives were taken. If I had to make a contrast in my favour on this matter it is possible to examine the record for every year and see that my hon. Friend the Member for Merthyr Tydfil and the right hon. Member for Devonport tried all the time to seek new initiatives. If we ran into the sand we would try to find something else. I did not believe in the need for permanent deterrents, unlike the hon. Member for Shoreham. Once anyone there knew that we were determined to fight and could do so, any invasion would have been called off. Of course, there are difficulties in dealing with a junta, which by its nature is a dictatorship. It would be preferable to deal with a democratic Argentina.
We must wait for some time before discussions can begin, but I trust that the right hon. Lady understands that we shall not be content, for our sakes as well as for the sake of the islanders and our relations with our friends in Europe, the United States and South America, just to stand pat now. We should be understanding, and not push the Government too soon. As has been rightly said, the islanders have time to consider their position, but we must be prepared to consider at the appropriate time all the


solutions that have been put forward. If Argentina will be reasonable about the matter and not insist on absolute sovereignty, we can make any number of agreements, even with the junta, that would enable the people of the Falkland Islands to enjoy a more secure life than they will have, even in the armed camp that exists now. There are other suggestions, such as extending the Antarctic treaty or a United Nations trusteeship. One good thing that has emerged from the lamentable affair is that hon. Members and the British people are at least aware of the problems that we face with some of those small territories. We have dealt with Belize, although we have committed troops there and we must watch the position. However, we escaped from Belize in the end. Other countries are still with us. We should build on this in the House. We must carry the country with us when we try to settle those affairs, because educated and informed public opinion is the most reliable thing in a democracy.
We have not heard the last of this matter and the House must return to it on many occasions. I hope that once this debate is out of the way, and we have all said our piece, we can get on and think about the future of the islanders as well as our relations with them and with other countries. But if I must sum up the past decade, I do so by saying that there was a Labour Government who preserved an honourable peace and a Conservative Government who won a costly war.

Sir John Nott: My right hon. Friend the Member for Yeovil (Mr. Peyton), in a short and excellent speech yesterday, said most of what I wish to say today. For myself I am prepared to rest on the Franks report in its entirety. The terms of reference of the committee were agreed by the official Opposition. Indeed, I recollect that the terms of reference were amended at the request of the Leader of the Opposition. The membership of the Franks committee was agreed by the Leader of the Opposition and by all the principal parties in the House. For a former Prime Minister, the right hon. Member for Cardiff, South-East (Mr. Callaghan), who does not like the outcome of such a report, to state that it is a whitewash does no great service to the constitutional process of this country or to our ability to conduct inquiries of this kind.
I am not in a mood for either self-justification or recrimination. The British people have had enough of both. It was a tragic event, but we won. No Government have existed, nor will a Government ever exist, that can say with the benefit of hindsight that they might not have done a few things differently. In the real world of government, that will always be so. We happened to be in power when a dictator chanced his luck. We responded, and the dictator failed. To this day, it astonishes me how little went wrong in what, by any standards, must have been one of the most remarkable military achievements of modern times.
I accept that this debate is not about the conflict but about the days, months and years leading up to the invasion. Like many hon. Members, I have retraced my steps to the pre-invasion days in March, and while I recognise with the benefit of hindsight that some things might have been done differently, in the round Franks is

right. There is no evidence in his report that an act of unprovoked aggression would have been prevented had we acted differently at the time.
I understand that the right hon. Member for Cardiff, South-East is distressd, after all that he has said over many months, that the Franks report has vindicated the Government, and made the right hon. Gentleman look rather ridiculous. [Interruption.] The Franks report does not whitewash the right hon. Gentleman, who, throughout the months of conflict, stuck to his story that the Argentines knew about the 1977 deployment. He denied that that was a covert deployment. In response to his remarks a moment ago, I ask him why he was unwilling to tell the Franks committee—a very distinguished group of Privy Councillors—about his reasons for saying that in the House. All the evidence given to the Franks committee was secret and much of it was of the highest security sensitivity. If the right hon. Gentleman wished to say anything of a sensitive nature to the Franks committee in order to justify his claim, the committee would have respected it because it was dealing with such evidence; and I do not doubt that it would have made a statement to that effect.
Yet the right hon. Member for Leeds, South (Mr. Rees), the former Home Secretary, and Lord Lever were both on that Committee and put their names to a report that states clearly that no evidence was produced to show that the deployment was known to the Argentines. Had the right hon. Gentleman been a Minister when he made those repeated claims to the House about the 1977 deployment, he would have been accused of misleading the House and he would have been charged by the House to justify his claim. He still has not done so.
I said in the difficult Saturday debate—[Interruption.] I said in the difficult and disastrous Saturday debate, and I repeat it today, that if that deployment had been covert it could not have had a deterrent impact. However, if it was known, then it was an irresponsible exercise to place undefended frigates within the range of a navy several times their size and with a significant capability to strike with land-based or carrier-based aircraft at undefended frigates in the South Atlantic. I must say to the right hon. Gentleman that if it was known to the Argentines, then it was an utterly irresponsible act to have been undertaken by the Prime Minister at the time.
I must remind the right hon. Gentleman that such a deployment was against the advice of our chiefs of staff. As the Franks report makes very clear, since the paper was substantially in every detail the same paper that the right hon. Gentleman as Prime Minister had before him at the time, I am puzzled that the chiefs of staff gave different advice to him from that which they gave to us. I suspect that what happened was that the then Prime Minister insisted that frigates should be deployed and the chiefs of staff acceded to that request, but I have no means of knowing. All I know is that the chiefs of staff advised us against it and I believe that the deployment of two frigates in that situation would have been an irresponsible act.

Mr. James Callaghan: I will not answer the first question the right hon. Gentleman asked me. I went into it in some detail with Franks; there are asterisks in the report and I do not propose to go further. As regards the position of the frigates, the only error I made in my supplementary question, because it was a supplementary question, was that I said 400 miles when it should have


been 1,000 miles. They were out of range. That disposes of that argument. As regards the position of the chiefs of staff, if they are to be brought into it, the note is that
the chief of the defence staff said the proposed force was appropriate".

Sir John Nott: As someone who was more than preoccupied for many months in keeping British naval ships out of the range of Argentine aircraft, I assure the right hon. Gentleman that 1,000 miles off the coast of Argentina was not outside the range of the Argentine aircraft carrier with its embarked aircraft. The aircraft carrier had a range stretching far further into the Atlantic than 1,000 miles. With hindsight, which is what this debate is all about, I believe that the deployment of a surface presence by us would only have served to precipitate the event we were trying to avoid and that my noble Friend was quite correct to reject it.
That brings me to the deployment of a nuclear submarine. Much has been made of this. Again, since I did not have the luxury of hindsight at the time, let me do what the right hon. Gentleman, the Leader of the Opposition and the Opposition Front Bench have been indulging in ever since; let me have the luxury on this occasion of indulging in some hindsight myself.
First, may I say that there was never any complete means of defending the Falkland Islands against aggression without the maintenance of the kind of garrison, the kind of radar and the kind of combat aircraft cover that we have deployed there now. It was either garrison Falklands or a trip wire of a kind which successive Governments had positioned in the Falkland Islands, because rightly they were not prepared to go for garrison Falklands. We knew the Argentines had an airborne capability, and frigates and SSNs, no matter how many had been there, could not have prevented an airborne landing in the Falkland Islands.
It is worth recalling—I speak here from memory—that the Argentines moved up to 1,000 men into Stanley by Hercules aircraft within 24 hours of the first seaborne landing. It is simply not the case that an SSN or frigates could have effectively defended the Falkland Islands against the airborne capability which we knew perfectly well the Argentines possessed.
Since, as Franks confirmed, we had no intelligence until 31 March of a possible invasion, it was clearly out of the question to respond to each and every outbreak of Argentine belligerence by moving a large garrison to the Falkland Islands. We could not do this each time the newspapers raised a scare. Such a policy had rightly been rejected by all Governments.
Secondly, although I do not deny, again using hindsight, that had we possessed different intelligence we might have positioned an SSN in the South Atlantic to have had it available if required, I have considered with great care the simple question what we would have done if an SSN had been there on 2 April and we had been faced with an invasion at that time.
After the sense of real shock understandably expressed by Parliament at the loss of life in the sinking of the Belgrano and felt, I may say, very strongly by me at the time, and the attacks made on the Government by right hon. Members of the Opposition at the sinking of the Belgrano, I was astonished only yesterday to learn that the then Labour Government under the right hon. Member for Cardiff, South-East, according to the story told by the right

hon. Member for Plymouth, Devonport (Dr. Owen) who was Foreign Secretary at the time, gave authority apparently to the submarine commander to sink laden ships in international waters 50 miles from British territory before a single shot had even been fired. No resolution 502 there; no recourse to article 51 of the United Nations charter there. For a member of a Government that sent a submarine to sink unprovoked ships on the high seas before a single shot had been fired to have lectured us on the United Nations charter—

Dr. David Owen: Is the right hon. Gentleman saying to the House that, if he had covertly sent an SSN on 8 March and it had been around the Falkland Islands on 1 April, he would not have sought to warn the oncoming Argentine fleet that if it came within a 50-mile zone of the Falklands it would be shot at? Is he really saying that he would have stood back and waited while such a fleet came into the exclusion zone and not have authorised the firing of a torpedo, but would instead have gone to the United Nations and invoked the UN charter? If that is what the right hon. Gentleman, who was Defence Secretary at the time, thought, no wonder the invasion took place.

Sir John Nott: I had with my right hon. Friends and with the chiefs of staff day by day to take the most difficult decisions on the rules of engagement. I assure the right hon. Gentleman that never did I take a decision on rules of engagement with my colleagues without first considering what would happen if our bluff was called. I have subsequently considered the question what we would have done, and my view of the matter is clear. If an SSN had fired a torpedo outside British territorial waters at an Argentine merchant ship approaching the Falkland Islands at that time we would have been condemned as the aggressor by the whole world. We would have had no support from any allies. Indeed, the more I consider the 1977 deployment, the more I realise what an irresponsible and useless act it was.
The nuclear submarines, which performed so brilliantly in the campaign—no one is a greater enthusiast for them than I—have now acquired a magic reputation. Had an SSN in the sea area surrounding the Falklands interdicted a seaborne invasion—and there is no assurance of that—it is likely that such an invasion would have been accompanied by conventional submarines, the most dangerous weapon for use against the SSN. We knew perfectly well that Argentine submarines had exercised with American nuclear submarines and, thus, that the Argentine submarines knew how to deal with SSNs. Such an invasion would have been accompanied by a conventional submarine and other anti-submarine warfare assets, and it is facile to suggest that an SSN alone could have stopped that invasion.
The right hon. Member for Devonport, I suspect, got it wrong. I doubt whether the rules of engagement were quite as he suggested. That is my personal opinion, and I would need to check. However, it seems more likely that the rules of engagement stated that the SSN should interdict an approaching vessel, check it out, give it a warning and use the minimum force. It would have been irresponsible to give that order, for it would have forced the submarine to the surface to challenge an Argentine surface ship. No sane person would ever advise a nuclear submarine to do that.
The story of the 1977 deployment is impossible to understand, and I reject—as I rejected in the Saturday debate—the fact that that had any deterrent impact at all.
I come briefly to Endurance. At the time of the Endurance announcement we made it clear that naval ships would deploy occasionally to the Falklands. It was necessary for me to bring the defence budget back into balance with the 3 per cent. growth. The naval staff recommended to me, as it had recommended to my predecessors, the scrapping of Endurance. It was either Endurance or another frigate, because the cost of running a frigate—a major defence asset—was approximately the same as the cost of running Endurance.
Speaking purely from a narrow defence interest, it made no sense at all to retain a ship that had no real defence capability—[HON. MEMBERS: "Oh."]. The right hon. Member for Leeds, East (Mr. Healey) would have taken the same decision had he been in charge. To hear the Leader of the Opposition call in aid the Admiral of the Fleet "Lord Hill-Dreadnorton" is one of the most amusing things that I have ever heard. Given, too, what the right hon. Member for Leeds, East did when Secretary of State for Defence, he finds an odd ally in Lord Hill-Norton.
After the aggression took place, I did not deny that the Endurance decision might have been taken as a signal. I accept that as an ex-post facto judgment. However, it cannot seriously be suggested that it was a central issue of the time. The right hon. Member for Cardiff, South-East tried to defend his position on Southern Thule. The Franks committee looked at that and said that the arrival of the Argentines on British sovereign territory, the fact that they remained there and came back in 1978 was clearly a much greater signal than the removal of Endurance could ever be.
The right hon. Gentleman took the first decision not to extend the airfield. While he was deploying frigates to Argentina, his Government were selling them type 42 destroyers. In fact, the right hon. Gentleman gave many more signals to Argentina, including lease-back, than I ever gave by saying that we would withdraw Endurance and deploy an occasional frigate in her place.

Mr. James Callaghan: We did extend the runway. Secondly, if the right hon. Gentleman believes that Southern Thule was such a terrible signal, why, for three years, did he not remove the Argentine base hut? It was there for only the last year of our regime, but he had three years in which to remove it if he thought that it was so wrong. Why did he not attempt to do so?

Sir John Nott: I am merely saying—[HON. MEMBERS: "Answer"]—I shall try to answer—that as a result of the list of signals given to the Argentine of Great Britain's declining interest in the Falkland Islands, nobody with hindsight can suggest that the withdrawal of Endurance and the announcement that we would deploy frigates in her place was anything like the strength of signal given as a result of the right hon. Gentleman's failure to remove the Argentines from Southern Thule.

Mr. Healey: The right hon. Gentleman says no one can suggest that. However, that was done by the Foreign Secretary persistently for more than a year. The Falkland Islanders did so, as did the ambassador and many of his hon. Friends. He ignored them all. Does the right hon. Gentleman regard them as nobodies?

Sir John Nott: The right hon. Gentleman made a weak speech and he has said all that already. The truth of the affair is simple. The Argentines believed, as many other nations had come to believe, that the British people had lost the will to take firm and resolute action. It is as simple as that. They believed that British Governments had lost the will to respond. I suspect that historians will judge that that charge will more easily lie at the door of successive Governments of a Social Democratic-Labour kind than the Government of whom my right hon. Friend the Prime Minister is leader.
The right hon. Member for Leeds, East, made much of the failure to call a meeting of the defence committee to consider Falklands policy. I am at a loss to see why such a meeting was required. That is what I told the Franks committee. On average, the Prime Minister, the Foreign Secretary and myself met once, sometimes twice, a day. There was a continuing dialogue between us on the widest range of issues, and the main strands of our Falklands policy were agreed.
I supported wholly Lord Carrington's approach. When the South Georgia landing took place, the only sensible policy was one of diplomacy and not the threat of force. Lord Carrington was worried, and so was I, that any deployment of even an SSN would become known at that juncture and aggravate the crisis. As it happens, the deployment of an SSN on 29 March, or speculation of it, was all over the British newspapers within 36 hours. It might have made it all the more difficult for the junta to retreat from its position on South Georgia.
May we call it a day, now that we are concluding an inquest on the inquest, which the right hon. Gentleman the Leader of the Opposition asked to be set up and agreed, but of which he apparently does not like the conclusions because they have spoilt his fun? Outside the world of Parliament, I believe that the people want to look to the future.
The right hon. Member for Devonport made an excellent speech yesterday. I wish that he had been the Labour Party's spokesman throughout the Falklands campaign. Many brave people died defending the islanders' liberties. I can say to the right hon. Gentleman that no former Minister of Defence, knowing the awful power of the Soviet forces that threaten us, can want a single soldier, sailor or airman to spend one day more in the Falkland Islands in the South Atlantic than is absolutely necessary.
We can all talk of the need for a solution to the problem, as we have been talking about it for 20 years, but no one in this debate, nor over the earlier period, has provided such a solution. While they do not do so, we must continue to defend British citizens and territory in that part of the world.
It is my privilege to have served alongside our services when they were engaged in a hazardous and extremely difficult operation, and to have served under a great leader; and it fell to me to report to the House, which was never easy, the tragic loss of life which resulted from the Argentine aggression. If I felt responsible for that tragic loss of life, I should certainly feel a sense of shame; but I do not, and the Franks report has not found the Government responsible. I hope that we can now put this behind us, and look to the nation's future, or we face a much greater threat, if only all parts of the House could see it.

Mr. Donald Stewart: In his plea of mitigation the right hon. Member for St. Ives (Sir J. Nott) claimed that he lacked the benefit of hindsight at the time of the invasion, but the charge is that foresight was then in short supply.
It is not surprising that the right hon. Gentleman, the Prime Minister and members of the Government should welcome the report, because it has been a lifebelt for them, and they have snatched it with both hands. The same applies to the pleas to let bygones be bygones and to forget all about it. That would suit them down to the ground. Unfortunately, we had to pay a price for what was done and we should learn lessons from it.
An American lawyer is alleged to have ended his peroration to the jury by saying that
these are the conclusions on which I base my facts.
I should not go as far as that about the Franks report. I thought that the facts were accurate until the right hon. Member for Cardiff, South-East (Mr. Callaghan) said that in places even the facts were not as accurate as they ought to be.
It is scarcely credible that the invasion came "out of the blue" as the Prime Minster has claimed. General Haig's view, as related to Sir Nicholas Henderson, was that for some time the junta had been bent on the invasion. Other evidence has been forthcoming to support that view, although we are asked to believe that it was a sudden brainstorm of Galtieri within a couple of days of the invasion force moving off.
If the Prime Minister is to be compared to historical figures—Churchill and so on—which seems to be a frequent practice of Conservative Members, the one that springs to mind—in this one respect only—is Nelson, who put his telescope to his blind eye in defiance of the plainest signal. There was no lack of signals for the Argentines to read.
The right hon. Member for St. Ives dealt in some detail with the withdrawal of HMS Endurance, and this is my main point. The intention to withdraw HMS Endurance was probably the greatest signal for the Argentine. It is a feeble riposte by the Prime Minster and the Government to say that the presence of HMS Endurance, in the event, did not prevent the invasion, or, as the right hon. Gentleman said, that the vessel had "no defence capability". What counts is that the decision showed a lack of commitment to the people of the Falkland Islands.
In the only quotation that I shall make from the report, I submit that that fact is brought out clearly. Paragraph 286 states:
We recognise the limited military value of this vessel; but, as the only regular Royal Navy presence in the area, her symbolic role was important in relation to Argentina".
Later the report states:
HMS 'Endurance', as a token of the Government's commitment to the defence of the Falkland Islands and the Dependencies, was a valuable complement to that. That was clearly borne out by the press and intelligence reports of Argentine reactions to the decision to pay her off.
The warning was spelt out in February 1982 by the right hon. Member for Cardiff, South-East—this is where the right hon. Member for St. Ives is weak in talking about hindsight—when he spoke of the proposed withdrawal of the vessel as
an error that could have serious consequences."—[Official Report, 9 February 1982; Vol. 17, c. 856.]

President Truman was reputed to have a notice on his desk which read "The buck stops here." The Prime Minister's desk should have a motto reading "The buck stops anywhere but here." As many speakers have emphasised, the right hon. Lady is not prepared to accept responsibility, but even if she was not in possession of the full facts, as Prime Minister in charge of the Cabinet she cannot avoid responsibility.
I supported the sending of the task force. I have no reason to believe that any other option was then open to the Government. I still believe that in the circumstances that was the correct thing to do. I did not support the people of the Falkland Islands with the hope of keeping a certain piece of land coloured red on the map.
The Argentine invasion presents us with a new position. A "Fortress Falklands" stretching into the foreseeable future is nonsense. The Prime Minister has said a good deal about the Falkland Islanders' wish to remain British. One wonders what she said to the 400 islanders who were to be deprived of British citizenship by the Government's mean-minded legislation.
Many of us, in different parties, have been pressing successive Governments for modest expenditure in the Falklands. It was turned down, to be replaced today by astronomical costs. Moderate outlays may have convinced Argentina of the British Government's serious commitment to the islands. I do not believe that any British Government will shoulder the current burden indefinitely. Sooner, rather than later, the islanders will recognise that the status quo cannot be regained.
An 80-year-old woman has been flown to the United Kingdom for an operation on her hip. That is untenable for serious illness or injury in the future. One Falkland Islander said on the radio, at about the time of the invasion, that he had three daughters and that a big garrison would mean that they would be courted by soldiers, who would marry them and take them away. The result would be an ageing population in the islands. The islanders will now be aware of the threat of Argentine hostility, which could erupt at any time into attack.
Like the hon. Member for Surbiton (Sir N. Fisher), I have been a supporter and defender of the Falkland islanders' interests, but, unlike the hon. Gentleman, I accept that no arrangement can be made now. As the Foreign Secretary said today, the scars are too fresh. I do not think that anybody would quarrel with that.
We have a new situation that demands a new answer at the end of the day. One hopes that a democratic Government will come to power in Argentina and that the British Government will face the situation before them.

Sir Bernard Braine: Like the right hon. Member for Cardiff, South-East (Mr. Callaghan), I gave evidence to the Franks committee, but, unlike him, I make no criticism of what is in the report. Given its terms of reference, I think that the committee of inquiry tackled an immensely difficult task and performed it very well.
One can understand the mortification of those who hoped that the report would provide material for the impeachment of Ministers, especially, of course, the Prime Minister, for high crimes and misdemeanours. How discomfited they must have been by its final conclusion that no blame can be attributed to the present Government for the Argentine invasion of 2 April.
It would be far better to start by recognising, as my right hon. Friend the Foreign Secretary did this afternoon, who was to blame for that act of aggression. It was the Argentine junta, and no one else. It would be far better to acknowledge from the outset that the errors and miscalculations—and they were many—of successive Governments were redeemed in a sense by the courage and resolution of the Prime Minister. If it had not been for her—if matters had been left, for example, to the prescriptions of some among us in this House and many outside—we would not have recovered the islands from the aggressors. Of that I am convinced.
I thought that the Prime Minister put her finger unerringly on the crucial point when she said yesterday:
No solution which satisfied the Argentine demand for sovereignty pure and simple could possibly be reconciled with the wishes of the islanders or of this House."—[Official Report, 25 January 1983; Vol. 35, c. 795.]
That should have been seen from the beginning, in the mid-1960s, when the issue was first raised in a major way. It was certainly seen by many of us in this House but not, alas, by those in successive Governments who determine policy. I cannot fully accept therefore the account that my right hon. Friend the Foreign Secretary gave of the conduct of policy. The facts point in a somewhat different direction.
It can be demonstrated that, although no Government would have defaulted on the promise to consult the Falkland Islanders' wishes, efforts were constantly made to weaken their resolution by forcing them into increasing dependence for their external communications upon Argentina and by discouraging investment and development. It was a matter of time, of playing it long. There was certainly a combination of confused objectives—outright cession in 1968, condominium in 1973 and lease-back in 1980, and, as I shall show, from 1976 onward an appalling moral blindness.
Initially, there was the failure to understand that, as the process of decolonisation gathered momentum in the late 1950s and 1960s everywhere else in the former colonial empire—a healthy and necessary process and one very much to the credit of our country—the Falklands were an exception. It was ironic that this, the one dependency that was paying its way, was completely debt free and was making a net contribution to the British balance of payments and yet it was left out of account.
Since the idea of integration with the mother country was not acceptable here, there was a clear failure to ensure proper constitutional development, as in every other colony. Was that a deliberate act of policy designed to avoid annoying the Argentines?
I can reveal to the House for the first time that between 1972 and 1975 communications from the Commonwealth Parliamentary Association to elected legislators in the Falkland Islands were sent but were never received. Falkland Island legislators were effectively cut of from any contact with their fellow parliamentarians in the Commonwealth for two and a half years. Were these letters intercepted? Was there a misunderstanding? Or was this by design? If by design, what was the purpose? Was it to isolate the islands' leaders the better to exert pressure upon them? The information is there in the

Commonwealth Parliamentary Association. There ought to be an inquiry into the matter. I told the Franks committee about it; I see no reference to it in the report.
Then there was the failure to ensure appropriate economic development and to implement the admirable Shackleton proposals with Argentine co-operation if it could be secured, but without it if necessary.

Mr. Russell Johnston: Before the hon. Gentleman leaves that point, which is new to the House, I am puzzled to know why the Commonwealth Parliamentary Association, since it received no response and would normally expect one, did not pursue the matter then. Could he please explain that?

Sir Bernard Braine: The matter was pursued by correspondence by the Secretary-General, Sir Robin Vanderfelt, and I checked the statement that I have just made with him earlier today.
I suggest that early inquiries be made about the matter. It is very serious indeed, and I find it very difficult to understand why it has not been pursued.
There was also the failure to realise after the military coup in March 1976 that it would be politically unwise and morally wrong to engage in negotiations on transferring sovereignty over the islands to a cruel and repressive regime, openly condemned at that time by world opinion for its appalling violations of basic human rights. There was the failure to insist before such negotiations began that the Argentine Government should provide information about the fate of British and other European Community nationals who were known to have disappeared into the junta's prisons and torture chambers.
It was not that successive British Governments wanted to betray the Falkland Islanders—after all, repeated promises had been made in the House that there would be no transfer of sovereignty without consulting them—but that their postures, if not their actions, or inaction, so often gave the Argentines the impression that they would do so in the end, more by neglect than by abandonment. The impression was given that the Falklands were a nuisance, an obstacle to improving relations with an important Latin American country which offered a lucrative market for our exports, including, if I may say so, arms. Was it not the case that the Labour Government would have sold Harriers to the Argentines if they had wanted them?
The real story is disgraceful. There is a perceptive passage in Joe Haines' book "The Politics of Power" which shows how the decision-makers viewed the matter. Mr. Haines, it will be remembered, was the very able press secretary of the right hon. Member for Huyton (Sir H. Wilson) when he was Prime Minister. He wrote:
If it were possible to compress the FCO's ideal world into a single concept I suppose it would look something like a Common Market peopled entirely by crusading, anti-Communist Bedouin. If I lived in Gibraltar or the Falkland Islands I would not sleep at night for worrying about it, because so far as policy is concerned those terroritories are peripheral.
My concern therefore is not with what the Franks report says, but with what it does not say; not with the reasons why negotiations with Argentina were not pressed with more skill, vigour and imagination, but with why after the Fascist coup in March 1976, when it quickly became clear that the junta was palpably unfit to govern its own people, negotiations were pressed at all.
Consider the situation in Argentina by February 1977 when the then Foreign and Commonwealth Secretary


announced in the House that he was reopening negotiations and would be sending out a Minister of State to pave the way.
The Leader of the Opposition yesterday said that in his day mistakes did not result in the loss of lives. He is forgetful. The first casualties of the Argentine junta were not British service men or Falkland Islanders; they were Argentine. On the very day on which the Minister of State went to Buenos Aires—I am sorry that he is not here, because I should like to say this to his face—on 21 February 1977 and confirmed that Britain was prepared to discuss the issue of sovereignty, evidence was given by Argentine human rights activists to the United Nations Commission on Human Rights in Geneva that up to that date 2,300 people had been murdered and more than 20,000 people had disappeared. According to The Times of 22 February, the witnesses gave details of appalling tortures.
There is another item of information which was not revealed to the House until I dragged it out. Among the "disappeared" at that time was a British subject, Walter Nelson Fleury, aged 22, who had been abducted in Buenos Aires in August 1976. He has never been heard of since.
All the civilised world had known about the savage turn of events in Argentina before the reopening of negotiations, save Whitehall—or did it know and choose to turn a blind eye? A United States Congressional Committee had taken evidence of the appalling crimes being committed. President Giscard d'Estaing of France had protested against the abduction and almost certain murder of French nuns. The Catholic Institute for International Relations had published details of kidnapping and murder of priests by the brave Argentina navy, and the killing of the bishop of La Rioja in an arranged car accident after he protested against the repeated violations of human rights.
Later on, the Inter-American Commission on Human Rights reported to the Organisation of American States that large numbers of people had been killed while in detention, that thousands had disappeared and must be presumed dead, that torture and other cruel and degrading treatment has been used systematically and that the right to fair trial had been denied.
The House should know that the methods of torture and killing were unbelievably cruel. The testimony of Graciele Geuna about her treatment and that of fellow prisoners in the La Perla camp at Cordoba published by Amnesty International—information available to any Member who chooses to ask for it—is one of the most horrifying documents that I have read in my life. Executions at La Perla were carried out in the presence of senior Argentine officers, including, it was alleged, the son of President Videla. The junta was not content to treat its own people in this way. People of 29 other nationalities were swept into its prisons and torture chambers—among them several hundreds from European Community countries. Dr. Douglas Gillie Whitehead, a British citizen born in Berwick, was abducted from his home in Buenos Aires in September 1977. His brother Derek was abducted on the same day. Neither has been heard of since.
It is not surprising therefore that, as the 1977 negotiations got under way, The Times said in its leading article:
There should especially be no discussions on sovereignty with a Government that is running its own country with such disregard for basic human values. Even by South American

standards the Government of Argentina is an exceptionally nasty one … It is not a country with whose Government Britain ought to consider even talking about the future status of one of its colonies.
In November 1977 the United States Secretary of State, Mr. Vance, visited Argentina and presented the Government with a list of 7,500 missing persons. What were the British Government of that day doing? They were bravely fending off the Falkland Islands lobby in this House. They were pressing on with the negotiations. Indeed, by February 1978 two joint British-Argentina working parties were hard at work at Lima in Peru. One of them was engaged in discussing sovereignty. The date is important, because a few weeks after that the International Commission of Jurists noted that 23 judges and lawyers had been murdered in Argentina, that 41 had disappeared and that 109 had been detained for varying periods.
When these cosy little diplomatic talks were under way, the tide of murder and repression was at its height. The victims included parliamentarians—they were not safe. They included diplomats, academics, doctors, judges, trade union activists, journalists, teachers, students, priests and even housewives; no one was safe. Yet our representatives could continue discussing how Falkland Islanders, British in blood, bone and tradition, might be persuaded to join this corrupt and cruel state.
Not one speaker in this debate, or at any time throughout the debates on the Falklands, has chosen to reflect on those facts. In every civilised country in the world there has been discussion and protest resolutions have been passed. The European Parliament has pronounced on the matter, but no resolution has been passed in this place. Why? Because there has been a conspiracy of silence on both sides of the House.
So it dragged on. Alas, I have to say that the process of negotiation against this background of evil continued under the present Government. In November 1980, when my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) was patiently trying to persuade the Falkland Islanders to agree to lease-back, and also visited Buenos Aires, the Inter-American Commission on Human Rights reported to the Organisation of American States that 5,000 people had been executed without trial in Argentina. It specifically charged that
Persons belonging to or connected with Government security agencies have killed numerous men and women subsequent to their being placed in detention".
In God's name, what were British Ministers doing negotiating with the representatives of a criminal regime over the possible transfer of British people and British territory to that kind of rule?
The turning of a blind eye to the iniquities of the junta is not dealt with in the Franks report. There is a passing reference in paragraph 273, but I submit that this aspect was bound to stiffen the resolution of the Falkland Islanders, who knew perfectly well what was going on, and it was bound to stiffen the resolution of Back Benchers who were determined to support them.
What lessons can we draw from this sorry story, redeemed only by a magnificent military rescue operation? First, it is clear that we should not have encouraged Argentina at any stage by acquiescing in negotiations, especially after 1976, to think that there could ever he a transfer of sovereignty unless the Falkland Islanders


expressly wished it. The islanders made it plain over and over again in the resolutions in their legislature that they did not want it, and they want it even less now.
Secondly, there can be no resumption of negotiations, anyway until, at the very least, Argentina is purged of its self-appointed, cruel, corrupt and heartless military regime and returns to democratic Government and respect for fundamental human rights. There are rumblings of discontent there now. The thousands of relatives of the disappeared ones are agitating for justice, as mass graves are now being opened up and bodies are found. But the prospect of normalcy returning to Argentina is remote, at least for a long time.
Thirdly, I agree with those who have said in the debate that we should learn from the past, that we should put it behind us and start thinking positively about the future. I have been giving some thought to that aspect. It seems to me that the argument over sovereignty is largely a sterile one. Sovereignty is not an end in itself; it is a means to an end. It is a means of safeguarding the security, the interests and the way of life of an identifiable national group.
If the Falkland Islands had been 400 miles off the coast of Australia or New Zealand, there would have been no problem and they would have been integrated happily with one or the other long ago. However, it has been their misfortune that their nearest neighbour is a notoriously unstable state governed by Fascist bullies who are skilled only in the arts of suppression and murder. That has been their fate.
Where then do we go from here? It is unrealistic to assume that there can be any resumption of bilateral talks with Argentina for a long time to come. Everyone must accept that. Surely that will leave us in a position in which the islands remain, in the eyes of a large part of the world, as a colonial dependency requiring substantial subsidies from Britain and a large garrison. Sir Nicholas Henderson was right in his article of last Sunday to warn us of the pitfalls ahead. In my opinion, therefore, it is not too early to turn our minds to taking an entirely new approach.
In Antarctica Britain has loyally abided by the treaty under which disputes over sovereignty have been frozen and issues of resource control and development are contained within a wide multinational framework. This has been the means of keeping 10 per cent. of the earth's land surface demilitarised and of advancing scientific research and co-operation between about 14 nations. It is a model regime. Is there not a case for trying to harmonise this entirely civilised approach to Antarctic questions with our approach to the Falklands? One way of moving towards that would be for Britain, after a decent interval, to indicate to the United Nations that she would be prepared to put the Falkland Islands under United Nations trusteeship provided, and only provided, that British administration remained.
There is, of course, no precedent for that. All the other 11 United Nations trusteeship territories were detached from powers that were defeated in the first and second world wars. No power has hitherto made use of the provision in the United Nations charter to place a dependent territory voluntarily under United Nations trusteeship. However, I must tell the House that it could be done under articles 87 and 88, and here it is essential

to remember that the essence of United Nations trusteeship is that sovereignty, in the sense of legal title, is held in trust by the United Nations for the inhabitants and no one else.
In my opinion, it is inconceivable that even a recalcitrant Argentina would be prepared to harass a trusteeship territory in the way in which it has harassed a British colony for the past 20 years. Article 76B would entrench before the eyes of the world the Falkland Islanders' rights to self-determination. A move in this direction would show that Britain seeks a peaceful, responsible, fair and just solution to the problem in the interests of the islanders and the international community. It would be more in harmony with the Antarctic treaty system. It would enable the Falkland Islands themselves to become what they are geographically placed to be—a gateway to the Antarctic that is safe, secure and free.
I do not envisage any quick solution on the lines that I have set out, but it is essential, after the recent blood-letting, for Britain to demonstrate, as it has been doing for some years in the Antarctic, that she is ready to co-operate with other states in the south Atlantic for the good of all. It is just possible, but only just, that out of the errors of the past we can both safeguard the interests of the Falkland islanders and build a happier relationship with their neighbours in the region. That is the task to which we should now turn our hand.

Mr. Russell Johnston: It is always a great pleasure to be called after the hon. Member for Essex, South-East (Sir B. Braine). The hon. Gentleman has a rollicking style, as we all know. He always reminds me of the knights of derring-do whom I read about in my childhood. He is what one might describe as a straight guy. He is well known in the House for standing up for human rights wherever they are oppressed. He is also known on the issue that we are discussing as being a regular critic of both the British and Argentine Governments and of all Governments of all persuasions. One feels that what he says is very straightforward.
I prefer to follow the remarks of the hon. Member for Essex, South-East than those of the former Secretary of State for Defence, the right hon. Member for St. Ives (Sir J. Nott), who made a remarkably unapologetic speech. He came to us smiling—perhaps that is his style and perhaps that is the way that he does it. His speech was not impressive. It was rather depressing to find that he seemed unable to be other than extremely partisan. A succession of speakers from both sides of the House have tried to avoid being partisan and to consider the real problems that face the House and which, as the Franks report states, have faced successive Governments.
I have never sought to suggest that the problems faced by the Government and the Prime Minister in the stressful times leading up to the despatch of the task force and the progress of the force to the islands, as well as the various negotiations that were in train before the invasion took place, were other than intensely difficult. It cannot really be suggested that others would have approached them in a different way. It is wrong to suggest that we on the Opposition Benches were not tremendously emotionally involved. We had to ask ourselves whether it was right to give support to the Government while lacking, as inevitably was the case, the information that the


Government had. I remember how I ended my speech on 20 May. I said that there was a feeling that a landing was inevitable. I continued:
If that is to be, the calculation and the responsibility lie with the Government. Our thoughts and prayers will be with our forces who, in the bitter cold of the South Atlantic, will have the job of correcting political misjudgments—some with their lives."—[Official Report,20 May 1982; Vol. 24, c. 523.]
And some did. We are now told that really there were no misjudgments. I find that hard to accept.
First, the Falkland Islands issue, despite its recognised and evident high risk, was undoubtedly judged over many years not to be a priority by successive Governments. These successive Governments, advised by the Foreign Office and the Ministry of Defence, made a mistake in view of what ultimately took place. It was a mistake not to give the issue a higher degree of priority. The Franks report warns against the dangers of the wisdom of hindsight with which we are all so well endowed. That is true. But it can equally be said that Governments are expected to exhibit prescience. If they fail to do so, they are not meeting the expectations of those who elected them.
The right hon. Member for Bristol, South East (Mr. Benn) is not in his place. I profoundly disagree with his views. I am sorry that I was not present yesterday but I have studied carefully the speeches that were made, and I believe that the press is wrong to say that we should not spend a second day discussing the Franks report. It was a pyrotechnic day yesterday and it is wise and sensible for the House soberly to consider the issue in the light of that pyrotechnic day.
However, the right hon. Member for Bristol, South-East remarked that
the Prime Minister … emerges … as someone profoundly disinterested in the Falklands".—[Official Report, 25 January 1983; Vol. 35, c. 832.]
That is borne out, it is suggested, by paragraph 292 of the Franks report. That paragraph was quoted by the right hon. Member for Leeds, East (Mr. Healey) as he spoke from the Opposition Front Bench. That is fair comment but in fairness it cannot be confined to the right hon. Lady. Those of us who were involved in advancing the Falklands case and have been damned as having prevented agreement might also come into that category.
A headline in this week's The Sunday Times says:
The Falklands lobby mesmerised Governments.
That lobby was not at all co-ordinated. It was all-party and based on nothing more complicated than the belief that the few sheep farmers on that desolate group of islands who depend on us should not be betrayed to a tyrannical Government. There was nothing planned or political about it; it was a straightforward gut reaction. Many hon. Members such as myself and the right hon. Member for Western Isles (Mr. Stewart) have lived on remote islands. We know what it is like and felt a natural sympathy for the Falkland Islanders.
Much has been made of Lord Carrington's suggestion that the public should be educated. It was considered and rejected. I am not convinced that it was realistic to consider it in the first place. But far from there being an attempt to educate, there was no attempt to engage in a dialogue with people such as me. The hon. Member for Essex, South-East can correct me if I am wrong, but I am not aware of any attempt to engage in dialogue with members of the Falklands Association so that they could

put conflicting points of view that may have led the Government to approach the problem from a slightly different angle.
Furthermore, hon. Members with an interest in the Falklands had other pressures on their time. The suggestion that we did nothing other than promote the interests of the Falklands is nonsense. We alleged on 2 December that there were plans in the Foreign Office to get rid of the Falkland Islands. That has been hotly denied today but no one denied it hotly to us then. Perhaps that is one of the reasons why Back Benchers such as myself feel that the Foreign Office is secretive. No Minister from any Government has appeared willing to engage in a dialogue with us.

Mr. John Stokes: Without in any way wishing to show a lack of respect for the hon. Member for Inverness (Mr. Johnston), he will recollect that the Liberal party has not been in power for 50 years. Therefore, is there any experience or expertise that the Liberal party has which can be added to our knowledge of these extremely complicated matters?

Mr. Johnston: Electoral history agrees with what the hon. Gentleman said. The hon. Member for Halesowen and Stourbridge (Mr. Stokes) may believe that he holds reasonable and democratic views. I am examining an issue that I have had knowledge of for some time.
The Prime Minister yesterday dealt with contingency arrangements. That has been referred to today. That was the subject of a terse and proper note that she wrote on 8 March. Several hon. Members have asked what arrangements were made. When the Argentines landed, they made much of the fact that they were achieving a bloodless seizure of the Falklands. There was much talk of the fact that they had been trained to do that. It is clear that they wanted to make a quick grab and did not want to engage in a major battle. It is therefore fair to argue that they would have been deterred by far less than the armada that the chiefs of staff postulated. They set out what Britain would need to forestall a full-scale invasion. I am not sure of the difference between a full-scale invasion and an invasion. Nevertheless, there had to be a carrier, two or three frigates, a submarine, support vessels and the rest. I doubt whether that size of force was necessary to deter, even if it was necessary to engage in a direct conflict.
The hon. Member for Perth and East Perthshire (Mr. Walker) is shaking his head. I remember when I did my national service in Berlin that we had 12 tanks that were regularly paraded up and down the Olympic stadium on the Queen's birthday. No doubt that cast tremendous fear into the Soviet breast, but I do not believe that they represented a challenge. They represented an effective token presence. That also is what HMS Endurance was about. One cannot argue the importance of HMS Endurance remaining in the South Atlantic when one knows about its limited power and, at the same time, say that a larger force was necessary to represent a proper deterrent.
The Prime Minister said yesterday that if two frigates were sent she would have been fearful for their crew. What about the marines who were already on the islands? Obviously, that is not the same—there were only a few of them so they were less important. My simple point is that one does not need the same force to deter an invasion as one needs to engage in hostilities.

Mr. Bill Walker: Does the hon. Gentleman accept the normal military interpretation of deterrence, which is the ability to inflict an unacceptable level of damage on a would-be aggressor? Unfortunately, politicians do not always understand that. It would have been suicide to send two ships without aircraft cover. There is no way in which surface ships could have coped with the Argentine air force, even if they had had Harriers.

Mr. Johnston: As the right hon. Member for Plymouth, Devonport (Dr. Owen) said yesterday, it was a mistake not to send a submarine because the Argentines were not looking for a conflict. They were looking for a quick grab. All the signals demonstrate that. The Foreign Secretary dwelt on that today. He said that to have a submarine there would cost quite a lot. How much? He said nothing that proved that the deployment of a submarine would have represented an unreasonable burden on the fairly flexible defence budget that all Governments operate. The hon. Member for Plymouth, Sutton (Mr. Clark) is muttering from an extremely reclined position. Perhaps he has something to say.

Mr. Alan Clark: I make no apology for what I said. It was that the frequent pauses and longeur in the hon. Gentleman's speech may be attributed to the sub-functions of reading a speech with imperfectly corrected vision.

Mr. Johnston: The hon. Gentleman is happy to be rude. I am not willing to respond to that approach. My argument is simply that there is evidence to suggest that the Government could have provided an effective deterrent but did not do so. That mistake is unique to the present Government.
Paragraph 2 of annexe A in the Franks report says:
"Assertion: Clear warnings of the invasion from American intelligence sources were circulating more than a week beforehand.
Comment: No intelligence about the invasion was received from American sources, before it took place, by satellite or otherwise.
All I, as a Back Bencher, can say is that I find that extraordinary. I always understood that there were CIA agents on every street corner in Buenos Aires. It is extraordinary that we maintain an intelligence system without apparently receiving any return. Clearly James Bond is dead.
I wish to mark the points made by other hon. Members about the British Nationality Act but will not develop that theme further.
In conclusion, I shall try to look forward, not back, in my remarks, as many hon. Members have done, and which the press has rightly asked us to do. The Prime Minister, in her opening speech yesterday, clearly and succinctly expressed the problem—the clash between the Argentine demand for sovereignty and the islanders' wish to maintain the status quo. The right hon. Member for Down, South (Mr. Powell), with whose views I often disagree, said fairly clearly yesterday—I shall paraphrase him—that successive Governments had cynically shown deference to the idea of the paramountcy of the islanders, while putting all conceivable pressure on them to alter their views, and that that was almost irrespective of Government and was not an honest approach.

Mr. Robert Rhodes James: That was part of Liberal policy.

Mr. Johnston: It was not.

Mr. Rhodes James: I was sorry not to hear the hon. Gentleman's opening remarks. I remind him of his contribution on 2 December 1980, when he spoke on behalf of the Liberal party—it is annex F of the Franks report. It was a major factor in the destruction of the leaseback proposal put forward by the Government, which was also the policy of the previous Labour Government, and was our honest endeavour to try to reach a peaceful solution. The hon. Gentleman said that he did not want to look back, but only to look forward. I suggest that he looks back on his own record.

Mr. Johnston: I was speaking about that matter before the hon. Gentleman entered the Chamber. It is not entirely fair to make such an intervention in the middle of my speech when I had already dealt with that point. I only gave way because I usually respect the hon. Gentleman's views.
I said that I agreed with the right hon. Member for Down, South in his analysis of the matter. With respect to my hon. Friend the Member for Devonport, I slightly dissent from his style of references yesterday. It is a statistical fact that in size the Falkland Islanders represent a parish council. However, that is not the impression that we wish to convey. All hon. Members will remember that Peter Jenkins of The Guardian said during the conflict that because there were few islanders we should not be over-concerned about them. We should not take that view. Freedom is no less worth safeguarding, defending and, if necessary, fighting for simply because not many people are involved. I am sure that my right hon. Friend the Member for Devonport would not have wished to suggest anything else.
I have already set out my opinion in my speech shortly before Christmas. I wish that we could defend our position in the Falklands, but we must as a House and a Government make an analysis of what that will cost. If that means that we reach the conclusion that the cost of maintaining the security of the Falklands against capricious attack—which may happen at any time—is unbearable, we must say that directly and bluntly to the islanders. Successive Governments have failed to do that. They have approached the problem in a two-headed manner. They have tried to suggest that they would safeguard the islands, while simultaneously trying to reach an agreement that they knew would not be acceptable to the islanders.
We must look to the United Nations. Lord Kennet mentioned that yesterday in a most interesting speech in another place. He spoke about the Antarctic solution and the Antarctic treaty. The hon. Member for Essex, South-East also referred to that. I hope that the Prime Minister, when she replies, will say whether she views such an idea with an open mind.
There is also the possibility of developing a United Nations force. The fact that Guatemala has today broken off negotiations and now lays claim to the whole of Belize will create a comparable problem for Britain. It will be interesting to hear some direct comments on that within the ambit of the debate.
I agree with the Foreign Secretary that it is impossible to speak to the Argentines until they, clearly and unequivocably, renounce the use of force. But we cannot


stop there. The right hon. Member for Bristol, South-East quoted Nicholas Henderson in an article in The Sunday Times headed
At some stage the problem will have to be internationalised".
The House must recognise that. Seeking to do so will be the most effective way to defend the rights of a small but decent and inoffensive people who have been hardly and violently attacked. We must pursue that way forward.
We must also at long last seek some regulation of arms sales. My right hon. Friend the Member for Devonport was right to point to the inconsistency of our criticism of France while we are competing with her throughout the world to sell arms to totalitarian regimes. Surely the lessons that we have experienced during the Falklands war give us some reason to consider a new approach to this problem.

Mr. Deputy Speaker (Mr. Paul Dean): I call the hon. Member for Windsor and Maidenhead (Dr. Glyn).

Mr. Douglas: On a point of order, Mr. Deputy Speaker. At the beginning of the debate, Mr. Speaker delivered some strictures on hon. Members who came into the debate and then walked out. Would you consult Mr. Speaker about the fact that some hon. Members have sat through the debate for two days without being called, while other hon. Members, who openly admit that they were not here yesterday, have been called? I am not questioning the calling of speakers, but it appears to be preposterous after the strictures that Mr. Speaker administered at the beginning of the debate.

Mr. Deputy Speaker: I sympathise with the hon. Gentleman, but that is a frequent occurrence, and not only in major debates.

Dr. Alan Glyn: I am happy that I do not fall into the category referred to by the hon. Member for Dunfermline (Mr. Douglas). I was here yesterday for all the debate as well as today. I shall try to be brief so that other hon. Members may speak.
My right hon. Friend the Member for Yeovil (Mr. Peyton) touched on a most important point. He congratulated the Franks committee on its work and the depth in which it examined the issues. We must remember that not only did the Opposition have a say in the composition of that committee, but that two Opposition Members served on it and that there was a chance to alter the terms of reference.
Paragraph 339 of the report completely vindicates my right hon. Friend the Prime Minister and her Government. Any attempt to overturn that vindication would not be well received by the 28,000 troops who fought for liberty in the Falklands, with the attendant loss of many lives. It would not be a credit to them because in the end the magnificent operation was a complete vindication of our nation and our determination to defend freedom against armed aggression.
Successive Governments have tried to negotiate. They have had no success, because they have always had to balance sovereignty and the interests of the islanders against the difficulties of our trade relations with South America and our fears of overturning them.
The friction was first manifested in October 1975, with the Shackleton report. That was the first sign, and it is dealt with in paragraph 34. Paragraph 43 suggests that

some form of compromise might have been reached. If one looks at column 841 of yesterday's Hansard and the remarks of the right hon. Member for Cardiff, South-East (Mr. Callaghan) today, one sees that there is a slight difference. The hon. Member for Merthyr Tydfil (Mr. Rowlands) gave the impression yesterday that the Government in Buenos Aires did not know about the force, whereas today the right hon. Member for Cardiff, South-East gave the impression that they had known about it. In any case, I agree with my right hon. Friend the Member for St. Ives (Sir J. Nott). What sort of deterrent would it have been against an enormous force on the mainland?
In 1977 Mr. Crosland suggested to the islanders that we might be prepared to negotiate but their interests must be protected. The dialogue continued, but at the back of their minds any Government must have known that as the Argentine Government became stronger their demands would become firmer.
Paragraph 119 is most important. On his accession, President Galtieri was in a very strong position. Not only was he Head of State, but he had the navy completely under his control. It is not beyond belief that the task force that he sent out as a manoeuvre could have beer given an order to change course and invade. That proposition has not yet been put forward.
There have been many criticisms of our intelligence operations. With a dictatorship, one has to balance press reports against the reports of our intelligence organisation. It is easy to criticise, but Argentina is so large that it would be almost impossible for any intelligence network to cover the whole country. Forces could be gathered in one part of the country or another, and there might be very few people who really knew what the intentions of the Government were. In the Western world intelligence is available and the naval attaché can go everywhere, but even if one were allowed to go everywhere in Argentina it is such a vast country that it would be almost impossible to cover it. That is one of the factors that is not considered in depth in the references to security in the Franks report.
Both the Conservative party and the Labour party have always stressed the importance of the islanders, and the hon. Member for Inverness (Mr. Johnston) has just stressed that point too. But the question is not only about the islanders; it is about sovereignty and resorting to armed attack when diplomacy has completely failed. It is difficult to deal with dictators. One cannot get a straight answer out of them.
In paragraph 339 the Government are completely absolved. My right hon. Friend the Prime Minister and all her Government have come out unscathed. However, there are many lessons to be learnt, as the hon. Member for Inverness and many other hon. Members have said. There should be better intelligence links between the Foreign Office and the Ministry of Defence. I understand that that will be rectified. In future, we shall have to spend a great deal of money on the islands. If we are to continue with the fortress conception it will be expensive. It will be a long time before there will be a Government in Argentina with whom we can negotiate. The islanders suffered terribly under the Argentine Government's domination during the occupation.
We would be well advised to look at the new Shackleton report. We failed to observe the contents of his first report. Perhaps this time we shall take note of the second report and observe it. Many points in the report deserve attention. The other lesson that we must learn is


that we have basic interests to protect in the Antarctic. I go along with hon. Members who suggest that there should be co-operation of all Governments interested in the Antarctic so that the development of that area can be a co-operative effort. No doubt the Falkland Islanders can play a role in that. Many other countries will also be concerned. It was mentioned in another place yesterday that there are considerable claims on that part of the world. We should continue developing it and join other countries in doing so. That could be of great benefit.
I pay tribute to my right hon. Friend the Prime Minister for taking the initiative and making it clear that this country is not effete but a great nation that is capable of mounting an operation such as has never been mounted before. I take pride in being a member of my right hon. Friend's party.

Mr. George Foulkes: Last week when the Franks report was published I said that the report was
an establishment cover-up and a whitewash".—[Official Report, 18 January 1983; Vol. 35, c. 179.]
Conservative Members seemed to be shocked at the time. The Prime Minister asked me to withdraw. I did not and I shall not. I shall argue the case in more detail this evening. Indeed I received unexpected heavyweight support for my remarks when my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) used the word "whitewash".
The Prime Minister knows that she made a mistake. The strength of her reaction in mounting and sending the task force is a sign that she knew that she had made a mistake. She was forced to set up an inquiry. She did not do so willingly. Therefore, she set about ensuring that it would be so constituted—its members, the terms of reference, the method of its operation and publication—that it would be a cover-up rather than a revelation.
I do not say that with hindsight. I said that that was likely to happen. I described the Franks committee in that way on 8 July. I said that because of the predisposition of the members, the background and the self-protective mechanism of the establishment, which Conservative Members know so well and use—

Mr. Bill Walker: What about Labour Members?

Mr. Foulkes: As the hon. Gentleman says, some Labour Members tend to be sucked into the establishment as well. I said that that was likely to happen. The committee was not independent. It was not like a Select Committee, which cannot be picked because it is already in existence to investigate matters.
The Committee had then to report to the Prime Minister, and the Prime Minister saw the report first. She had the right of deletion on the grounds of so-called security or international relations. When she had seen the report, there was a carefully orchestrated campaign of leaks, and if that did not come from 10 Downing street—I suspect that it did—it may well have come from Smith square or somewhere else convenient.
The press leaks concentrated on the concluding paragraphs of the report, and were a deliberate exercise to condition minds to expect a certain outcome from the

report. It was a brainwashing exercise, to get into people's minds the three words which became the headlines—"Franks clears Maggie." That was the simple slogan and one that we have come to expect from the Prime Minister.
There was then a statement in the House, which was also carefully organised and selective. However, the Prime Minister was caught out by my hon. Friend the Member for Bolsover (Mr. Skinner) in that. She was selective to reinforce the conditioning that had already taken place in the leaks. The hon. Member for Perth and East Perthshire (Mr. Walker) said that we could have read the report before the statement, but there was hardly time to scuttle out to get it and no time to read and analyse the report. There was no time for us to refute the way that the Prime Minister was introducing it or for us to respond. Hon. Members and the public were conned. We were conditioned to expect a certain outcome, and we all thought that that was the outcome.
Now that hon. Members have had time to read the report carefully and the press has had time to analyse it, there has been a great revelation. The text of the report and the conclusions form a complete non sequitur. The conclusions are not justified by the text. Thank goodness, there is the beginnings of a backlash against that brainwashing. The Sunday Times said that the conclusions were at odds with the evidence and The Observer said that seven out of 10 people think that "Franks is a cover-up."
The British public and hon. Members cannot believe that Argentina could prepare, organise and mount an invasion force without us ever knowing, and with all the sophisticated mechanism of our intelligence. The Argentine press seemed to know. Even Mrs. Madge Nicholls—remember her?—saw the likelihood of an invasion and wrote to the Prime Minister. The Prime Minister replied that the marines on the island and HMS Endurance were adequate to repel such an invasion. We do not hear much of that letter in the report, but it was certainly a mistake.
I can offer an explanation why the Prime Minister did not anticipate what would happen. She does not hear what she does not want to hear, and that applies in economic policy as much as in anything else. Whether it was for reasons of dogma, cost or anything else, the signs were there of a possible invasion but she did not want to see them.
In reading Franks I cannot understand—I said this to the hon. Member for Cambridge (Mr. Rhodes James) in a radio interview the other day—how the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) can have been right, as Franks said, yet all those people who ignored his constant warnings can also be right. The Franks report says, again and again, in paragraphs 86, 90, 95, 151 and 187 that warnings were repeatedly given by the Minister of State and the Foreign Secretary.
Those hon. Members who savaged the Minister of State—I agree with the hon. Member for Cambridge on this—organised this. The hon. Member for Inverness (Mr. Johnston) may say that it was not organised, but we have interviewed representatives of the Falkland Islands committee on the Foreign Affairs Select Committee, and they told us that it was an organised lobby. Those hon. Members who organised the opposition to lease-back, without also accepting the consequences of such a rejection—that consideration should be given to preparing


fuller contingency plans for the defence of the islands—bear their share of the responsibility for the invasion. I include the hon. Member for Inverness.

Mr. Russell Johnston: It is not the case that there was any organisation on that day in which I was involved.

Mr. Foulkes: Almost every hon. Member who spoke and savaged the Minister is a member of the Falkland Islands committee. I agree with the Foreign Secretary that the past is useful particularly when looking to the future.
The Prime Minister has said that we now have no alternative to Fortress Falklands. That cannot be the case. When she says "we", she speaks for herself, for her war cabinet and perhaps for some of her more militaristic cohorts. It is not the only option for the House or for Britain. The right hon. Member for Plymouth, Devonport (Dr. Owen) yesterday concentrated on the dangers of getting on the unfortunate hook of the word "paramount"—that dreadful, dangerous word. There are 1,800—

Mr. Alan Clark: Labour Members used that word too.

Mr. Foulkes: I agree that it was not just Conservative Members. The 1,800 Falkland Islanders cannot have unlimited call on the United Kingdom taxpayers' money into the indefinite future to the tune of £1 million a day and more and more for ever and ever. The troops are already restless. There is no likelihood of a civil airlink with South America, or of a commercial development of the islands, with the constant and continuing threat of Argentine attack.
There is some hypocrisy in the use of the word "paramountcy". It is all right on sovereignty, but the islanders' views were not paramount when the British Nationality Act went through the House. The islanders' views are not paramount now when they support Lord Shackleton on land transfer and ask the Government to accept Shackleton's principal recommendation on land transfer. The Government have rejected it. So much for the paramountcy of the islanders' views.
Let us be honest about it: talks on sovereignty mean giving priority to the ownership of the islands rather than to the interests of the islanders. I am concerned not about the ownership of the islands but about the interests of the islanders. Some time—sooner or later, and better sooner—the pressure will be on us from our allies in Europe and America, from Latin America, from the United Nations and even from the islanders, to find a negotiated solution.
The solution may have to wait for a general election in Britain, and a Government who are less reactionary than the present Government. It may have to await an election in Argentina, and I am less pessimistic about that development than Conservative Members. However, we must find a solution that involves no garrison with five times as many troops as islanders, no enormous expenditure, no constant threat. It must be a solution that the Argentines can be persuaded to accept and the islanders will accept.
It is not only militants who are already saying this. Yesterday it was being said effectively by Lord Carrington, and eloquently by Lord Carver, who said
Surely, we cannot contemplate as permanent such an absurd disproportion between the defence effort and the actual United Kingdom interests involved … No other citizens of this country or of its dependencies have in the past or do now receive

that kind of support on anything like that scale … However distasteful it is to consider it, there is no alternative to consideration of some solution to the sovereignty issue which will satisfy Argentine amour-propre.
That is not a coded message; it is plain.
There is more and more cause for negotiations to look at the options. I am glad that the hon. Member for Essex South-East (Sir B. Braine) mentioned United Nations trusteeship positively. There is also the tripartite arrangement, or the lease-back arrangement again. All of these need to be examined. The Select Committee on Foreign Affairs is looking at that now. We have heard evidence from a large number of people. Next week, we shall be putting these options directly to the Falkland Islanders when we visit the Falkland Islands. That is something that the Prime Minister has not done. It is something that the Government have not done. It is something that needs to be done.
The resolute approach that we hear so much about is all right if the advice is sure and the direction is right. If the advice is poor and the direction is wrong, it is dangerous and, as we saw, even fatal. In the interests of the islanders and in the interests of the British taxpayers and peace, the Government must eventually start negotiating. I finish, as Lord Carver concluded yesterday, by saying:
my plea to the Government is that they should not do or say anything which will make the issue even more difficult than it already is."—[Official Report, House of Lords,25 January 1983; Vol. 438, c. 178.]

Mr. Charles Morrison: Contrary to the views of the hon. Member for South Ayrshire (Mr. Foulkes), the Franks report, in my opinion, is a masterpiece of analysis and presentation. I have no argument whatever with its conclusions. Nor, I think, should anyone else. As my right hon. Friend the Member for Spelthorne (Mr. Atkins) remarked yesterday, there can be no six people in the whole of the United Kingdom who know more than did the members of the Franks Committee about the subject in hand. But, of course, the report comes as a disappointment to many, as it supplies no scapegoat. I suppose it is a sort of national characteristic that we like to have a scapegoat—someone to blame so that the rest of us can sit back happily and a little smugly pointing the finger at a latter-day Admiral Byng. However, as Franks provides no scapegoat and while the Leader of the Opposition was generous enough yesterday to blame General Galtieri, others have exercised a great deal of licence in reading between the lines. The firm conclusion of Franks is that they are wrong.
It gives me particular pleasure that Foreign Office Ministers have been exonerated from blame. Since the Government came to office in 1979, the Foreign Office has probably had the finest team of Ministers in the Government. It is one of those political ironies that, in spite of that being the case, so many of them have fallen by the wayside. I am equally delighted that the Foreign Office itself has been exonerated. It has been subject to monstrously unfair criticism from some sections of the press. I trust that there are a number of journalists dining unpleasantly on their own poisoned words. The stigma has been removed from the Foreign Office at home, and this can only do good to the credibilty and confidence of our embassy staffs around the world. It did no service to the name of Great Britain among people abroad to know that representatives of our country were under suspicion and


apparently held in little confidence. I am therefore delighted that the report has exonerated the Foreign Office.
Like my right hon. Friend the Member for Yeovil (Mr. Peyton) who made a notable speech yesterday, I doubt the value of such a report as Franks unless it is to learn lessons for the future rather than to rake over the past. I wish to make one point only. Since 1967, British Governments have been prepared to cede the sovereignty of the Falkland Islands, subject to conditions. In other words, successive Governments concluded that it was not in the paramount and best interests of the United Kingdom and of the islanders to retain sovereignty. I see no reason to quarrel with that conclusion. Events have shown only too clearly that that was a negotiating position that could have been the foundation for an assured future, almost certainly on a lease-back basis, for the islands' economy, for the islanders and for Anglo-Argentine relations. That progress was not made may have been largely due to grasping stupidity on the part of Argentina.
There is, however, another point that we cannot ignore, which inhibited the chance of agreement. That point is summed up most succinctly in three words in paragraph 99 of the report. Those three words are "domestic political constraints". The context is the letter written to our ambassador in Buenos Aires giving that as the reason why no further progress could be made in negotiations. I read those three words as a euphemism for us—for this House and for our predecessors.
This House must take a major part of the responsibility for the strategy of general Micawberism. Not for the first time this House allowed its head to be ruled by its heart. It allowed emotion to overrule logic, most particularly and most recently on 2 December 1980 when, effectively, it killed off this Government's sensible proposals for a new initiative. None of us can escape some blame for that. Perhaps some of us are guilty of sins of commission while others of us are guilty of sins of omission.

Mr. Faulds: I endorse entirely the argument that the hon. Gentleman makes. Will he not add that the problems of the House of Commons are not only the appalling ignorance of most hon. Members about South America but also the malign role played in the opinions voiced by the House of Commons, because hon. Members have been suborned by the activities of the public relations outfit working for the Falkland Islands Company?

Mr. Morrison: I do not hold it against the public relations people who were operating on behalf of the Falklanders. After all, if people do not blow their own trumpet, who will play it for them? I shall be dealing with the point about knowledge in this House if the hon. Gentleman will be patient.
Effectively, on 2 December 1980, this House willed an end without insisting on the provisions of the means to uphold it. Fortress Falklands was the only policy to do that. Even that meant major change for the islanders. Implicitly, on 2 December, the House said that nothing should change, that the Falklanders should be allowed to continue to do their own thing just as they had done before, even benefiting, no doubt, from a continuing use of Argentine schools and hospitals. As we have now been forcefully reminded, that option sadly was not on offer. In effect, we allowed a romantic ideal to be the enemy of

reason, common sense and the long term interests of the United Kingdom and the Falkland Islanders. I hope that that does not happen again, there or elsewhere.
It might be said in our defence that if we had been more aware of the facts a majority of us might have reacted differently. I emphasise "majority" because I know full well that there are some hon. Members who would never be convinced of any view other than that the Falkland Islands should be allowed to continue as they have done up to 1982. Here I take up a point made by my hon. Friend the Member for Shoreham (Mr. Luce) in his excellent speech. If the programme of education, referred to particularly in paragraphs 61 and 98, had been pursued, things might have been different, but they were not. Why did not Governments—I say "Governments" in the plural—pursue a programme of education? Perhaps it was simply because they did not want a row, and a row on the Falklands might have seemed out of all proportion to the size of the problem. However, I cannot help feeling that that sounds a little wet.
So now the three policy options in paragraph 73 have become two—and for the time being in reality only one, and that is Fortress Falklands. Nevertheless, in the fullness of time the scene will change. It may change as a result of the development of moderation and democracy in Argentina. It may change as a result of national or bilateral or international initiatives, such as perhaps those foreseen by Sir Nicholas Henderson. Already some sensible Argentine voices are being raised, and ultimately it must be better for us to have Argentina and, indeed, the rest of Latin America as friends rather than as enemies.
As no less an authority than Lord Home said yesterday in another place, some time
a political solution to this problem will have to be found."—[Official Report, House of Lords, 25 January 1983; Vol. 438, c. 167.]
So, when peace is less brittle and joined by good will, I trust that we shall show that we in this House have learnt from the experience of 1982, because what happened then must never happen again.

Mr. Dick Douglas: I shall try to be brief and not necessarily follow the speech of the hon. Member for Devizes (Mr. Morrison) on this matter.
I come fairly new to an assessment of the Falklands situation. However, in fairness to myself, I should say that when the composition of the committee was announced, while not necessarily criticising those who were on it, I pointed out that the composition was fairly narrow and that if someone like Mary Goldring had been a member she might have provided a breath of outside air. I shall not dwell on that subject, because in my view the committee dwells too much on the legal burdens of proof and does not deal with the situation in sufficiently human terms.
The structure of the report, of necessity, has to deal with a logical—or seemingly logical—sequence of events. However, the operation of human affairs does not progress in that way. Even governmental affairs do not progress in that way. When some people write their memoirs, or the history of Governments, they tend to give the impression that there is a logic to human affairs. However, when one examines the work of my right hon. Friend the Member for Huyton (Sir H. Wilson) and his reminiscences about the Labour Government of which he was Prime Minister one gets the impression that things occur not necessarily


in a logical consequence—for instance, waking up and saying "We should stop the supply of arms to South Africa".
If we assess the situation in terms of legal standards of proof, the conclusions in paragraphs 266 and 239 are correct. No one can accuse the members of the Government of conspiring to let the Argentines invade on 2 April. Again on 2 April, no one could anticipate that on that exact day and at a specific time the Argentines would attack the islands. So Franks is correct that in standards of legal proof there was no mens rea—to use the legal term. However, that is not the same as seeking to anticipate the actions of another state or body of individuals. I do not expect to be burgled tonight, but if I lived in some parts of our cities I would take more care and greater precautions than I do living in the quietude of Auchtermuchty. Of course, the Prime Minister is correct to say that the situation in 1977 was not the same as in 1982, but, given the balances of probability, what were the circumstances that would have altered the Argentine response?
I want to deal with a few significant points. If we were to argue that the alternative policies that were placed before various Governments were roughly equal, certain situations evolved in late 1981 and early 1982 that would tilt the balance of probability in favour of the Argentines taking more strenuous action.
The first is the character of the junta led by General Galtieri, who had relatively friendly relationships with the American Government, who thought that he and his junta were a bulwark against Communism. Secondly, there is the presence of Admiral Anaya in the junta. I want to dwell a little on what I think is an error in the Franks report in relation to him. For some time he had been a naval attaché in the United Kingdom. However, the dates given in paragraph 62 appear to be incorrect. My information—I hope that this will be checked—is that Admiral Anaya completed his term as naval attaché in London in January 1976. It is not clear precisely when Massera's message was conveyed to the Foreign and Commonwealth Office, but it was clearly after September 1977. If by then, as I am informed, Admiral Anaya was director of naval personnel, it seems most unlikely that he had any diplomatic function. He certainly was not naval attaché at the time. Therefore, I suggest that a correction or some explanation of paragraph 62 is needed, although that is a marginal point.
Anyone assessing the intelligence should have asked Mr. Carless for his assessment of the toughest person in the junta and there is nothing in the Franks report or anywhere else to suggest that that was done. Therefore, I suggest that such an assessment was not necessarily undertaken by the Government.
We know that in the talks in New York in 1980 and 1981 several members of the Falkland Islands Council were in the company of Ministers. In January 1981 the Falkland Islands Council debated the motion that:
While this House does not like any of the ideas put forward by Mr. Ridley for a possible settlement of the sovereignty issue with Argentina it agrees that HMG should hold further talks with the Argentines at which this House should be represented and at which the British delegation should seek an agreement to freeze the dispute over sovereignty for a specified period of time.
I draw attention to that because some Members of the Islands Council were soft on the sovereignty issue and some were hard. In subsequent elections those who had shown any support for the sovereignty issue were defeated.

The Argentines had listening posts in the Falkland Islands and they knew exactly how the Falkland Islanders were reacting.
Another point in relation to this aspect is the significance to the Argentines, if not to us, of the 150th anniversary of Britain's claim to the islands. That may not weigh heavily with hon. Members but it is significant to the people of Argentina, just as Burns' "Scots, wha hae", about the battle in 1314, is significant to Scots. That is drummed into them. The Argentines believe that they were cheated of their claim to the Falklands 150 years ago, and the anniversary of their cheating has considerable significance for them. The factors that I have listed led to a toughening of the Argentine attitude.
The right hon. Member for St. Ives (Sir J. Nott), who is not in his place, made a cheap and demeaning speech about the contingency plans in 1977. I have great regard for his intellectual ability, but I wish that television cameras had been in the House today and yesterday. We should then have seen displayed the attitude of mind that made Lord Carrington shy away from presenting the issues to the Cabinet. It is one thing to be confronted with a ministerial colleague who is high-handed and aloof, but when there are two such Cabinet personalities—the right hon. Member for St. Ives and the Prime Minister—one can see why they would have been too much for the diplomatic niceties of Lord Carrington. [Interruption.] The Secretary of State for Employment has his own sophisticated way of dealing with such matters. Had the British people not only heard the speech of the right hon. Member for St. Ives but seen it today, they would realise why Lord Carrington took the view that he did.
Lord Carrington said yesterday:
During the course of 1981 and the beginning of 1982 I sent a number of minutes to my colleagues on the Overseas and Defence Policy Committee, keeping them abreast of what was happening. If any of them felt more discussion was necessary a telephone call to the Cabinet Office could have arranged a Defence Committee meeting. But my colleagues shared my view that nothing had happened during those months to alter our original decisions.".—[Official Report, House of Lords, 25 January 1983; Vol. 438, c. 159.]
That takes a bit of believing. Faced with a combination of the right hon. Member for St. Ives and the Prime Minister, Lord Carrington knew that he was on to a hiding to nothing on that issue.

Mr. Stuart Holland: The hon. Gentleman has been speaking for 15 minutes.

Mr. Douglas: The hon. Gentleman may wish to intervene—

Mr. Holland: On a point of order, Mr. Speaker, since I have been invited to make it. As the hon. Member for Dunfermline (Mr. Douglas) pointed out earlier, some hon. Members have sat through two days of debate and we do not have unlimited time.

Mr. Speaker: Both Front Benches have been kind enough to say that they would take five minutes off their winding-up time, which means that they will not start until 9.10 pm. That is in an effort to enable us to have some more speakers. I hope to call three more speakers before 9.10 pm.

Mr. Douglas: I shall try, Mr. Speaker, to draw my remarks to a conclusion.
Paragraph 284 of the Franks report clearly shows that in every case Ministers made a policy decision and sought a negotiated settlement that would be acceptable to Argentina and the islands.
We come to the main charge against the Government. Neither the officials nor the intelligence services were to blame. However, there was clear ministerial responsibility, and, therefore, although Lord Carrington says wrongly that one blames the man in charge, one should blame the woman in charge. The person who should have resigned was the Prime Minister. We are dealing here with the nature of government and the view of Cabinet collective responsibility. The Prime Minister's attitude is in direct variance to that.
It is all very well to talk about Fortress Falklands and to analyse what might happen in future, but in strict practical terms I do not see the people of Dunfermline—including those who work at the naval base at Rosyth—who made a significant contribution to the task force effort, accepting in perpetuity that Britain should stay in the Falkland Islands and use our wealth, both human and capital, until kingdom come to defend the posturing of the Prime Minister.

Lord James Douglas-Hamilton: I listened with great interest to the hon. Member for Dunfermline (Mr. Douglas), but I shall not pursue his remarks in view of the limited time.
The two points that I shall make relate to Southern Thule and to Sr. Constantino Davidoff. We know from the Franks report that Southern Thule was probably invaded in November 1976, yet there was no mention of the matter in the House of Commons index until about one and a half years later. I listened with great interest to the right hon. Member for Cardiff, South-East (Mr. Callaghan) because his account in the House this afternoon was rather different from the version given by the Labour Minister in another place on 10 May 1978. Lord Goronwy-Roberts said:
We understood that the residence, if I may call it that, was to be temporary; and it is a fact that, because of climatic conditions, seasonal adversity, it is practically impossible to be there all the year round.
The right hon. Member for Cardiff, South-East gave the impression this afternoon that the Argentines left because of the protest, but one and a half years later the Minister gave the impression that they left because of climatic conditions. The former Prime Minister, Lord Home, stated in another place on 10 May 1978:
Is it not very dangerous to leave that sort of situation hanging in the air for 18 months or longer, and would it not really encourage the Argentine Government to try something more ambitious, and even more dangerous?"—[Official Report, House of Lords, 10 May 1978; Vol. 391, c. 977–78.]
Those seem to be strangely prophetic words today from someone who had no axe to grind in the matter.
Two days later, my hon. Friend the Member for Essex, South-East (Sir B. Braine) asked a question of the hon. Member for Merthyr Tydfil (Mr. Rowlands). It is in the public interest that, when a British dependency is invaded, the House of Commons should be informed about it. I was glad to read a letter from my hon. Friend the Minister of State dated 23 August last year, written after the repossession of Southern Thule, making it quite clear that the Argentines who were there were all military personnel.
In contrast, the impression given in the reply of the hon. Member for Merthyr Tydfil on 12 May 1978 was that the personnel were civilians engaged in scientific work. It seems that they may have been military personnel and that they went there, as paragraphs 52 and 53 of the report state, with the approval of the Argentine naval commander-in-chief. The Argentine Ministry of Foreign Affairs sent a communication to the British chargé d'affaires saying that the purpose had been to establish a research station within the jurisdiction of Argentine sovereignty.
Paragraph 54 of the report states that the Argentine expectation had been that the British reaction would have been much stronger. At the very least, the House should have been informed about the matter. As paragraph 54 goes on to state:
If the Argentine personnel had been captured, the British Antarctic Survey party on South Georgia would have been taken off as a reprisal. According to further intelligence, there was an Argentine Navy contingency plan for a joint air force and navy invasion of the Falkland Islands.
When it met on 31 January 1977, the Joint Intelligence Committee assessed that the purpose of the expedition was to probe the British Government's reaction to such a demonstration. I suggest that the reaction was so muted, with the House of Commons not learning about the incident until one and a half years later, that the Argentines were given an incorrect impression about British willingness to stand by the Falkland Islands. It was a regrettable omission.
As a result, awareness of the extent and nature of the threat was at a lower level in the House than it would have been if we had known that a considerable number of military personnel had been sent there by the Argentine commander-in-chief, which I believe was the situation. I do not say this in any spirit of recrimination, but I hope that we will be given an assurance that, whatever the actions of the last Government, if any such action were to occur again the House would be informed immediately and not 18 months later.
I wish now to refer to Sr. Constantino Davidoff, who may have been involved in another probing exercise. He made a contract with the highly respected Edinburgh firm of Salvesen to purchase equipment on South Georgia and to dispose of it. It is interesting that the Franks report confirms that his two trips to South Georgia took place on board Argentine naval ships, the Almirante Irizar and later the Bahia Buen Suceso. It emerges that he broke the terms of his contract. When civilian and military personnel were landed on the second occasion reindeer were shot and the Argentine flag was raised.
The Governor gave it as his view that Sr. Davidoff was being used as a front to establish an Argentine presence. Also, I understand that Captain Barker of the Endurance gave evidence that there had been collusion between Sr. Davidoff and the Argentine navy, naval headquarters in Argentina having congratulated the Bahia Buen Suceso on a successful operation. He also pointed out that it had maintained radio silence, that there were flights over South Georgia by Argentine aircraft, and that the activities of the Almirante Irizar, all without clearance certificates, indicated collusion.
I mention these facts—I could mention others but I will not in view of the time—because the recent approach which appears to have been made on behalf of Sr. Davidoff to the Foreign and Commonwealth Office should


be examined carefully. The Foreign and Commonwealth Office was fully justified in the circumstances in making it clear that it would refuse him permission to land again in South Georgia for the time being at any rate.
No doubt many lessons can be learned. This is not a time for recrimination, but in future if something appears to be going seriously wrong the House of Commons should be kept fully and immediately informed.

Mr. Stuart Holland: Several arguments have been nailed during the debate, one being that the crisis was unavoidable because it was unforeseen. Franks makes it plain that, throughout February, pressure was mounting. Hon. Members have drawn attention to this and also in particular to the fact that the Prime Minister minuted a telegram from the ambassador to Buenos Aires on 3 March saying:
We must make contingency plans.
That was a month before the invasion. This was the Prime Minister who said that the Falklands crisis all came as a bolt from the blue when, in fact, it came in a minute in a red box a month before the invasion.
Several hon. Members have tried to address themselves to the lessons of the Falklands crisis and the invasion. It is clear that the islanders have been grossly disserved. Many of them, for example, now have unusable ground. There is talk of moving Stanley itself because of the difficulty of disposing of Argentine plastic mines. There is no attention to the real needs of the islanders. There is even quite appalling talk of further colonisation of the islands on plots of 100 acres of grade 5 land, equivalent to the top of the Cairngorms, which could perhaps suport six to eight sheep each but not a family, with no wheat, no vegetables and no processing for market.
In social terms, what is being done by the Government for the people themselves rather than the claims to property? What about hospital and educational facilities? What are the retirement prospects for people who traditionally have not been able to retire on the islands but have retired elsewhere, whether in Britain or in New Zealand?
The right hon. Member for Down, South (Mr. Powell), who is not with us at present, said that sovereignty in the Falklands could never be conditional. He is wrong. Effective sovereignty is always conditional, including the sovereignty of the Crown or the sovereignty of the House of Commons, of which it is so jealous and proud. The Crown in Parliament, not the Crown, is sovereign here. Parliament does not dictate that solutions should be unchanged for ever. Rather, it prides itself on being able to amend initial cases so that they are better adapted to real needs and circumstances. If the Government do not recognise that fact, we shall be condemned to fighting the battle of the Falklands for ever.
A long-term Falklands lesson is that indecision, inertia and incompetence on the part of Government led to a drift into crisis. Few hon. Members have addressed that lesson in terms of the wider implications for defence policy. There are two dimensions. The first has been the admitted unusability of nuclear-powered submarines in this crisis. The former Secretary of State, the right hon. Member for St. Ives (Sir J. Nott), told us that conventional submarines could track down a nuclear submarine and that the nuclear submarine could not surface. Our forces simply were not adapted to deal with situations of that kind.
The right hon. Gentleman also reminded us that in his view the real enemy is in Europe and the Soviet Union. Given the scenario of an inability to react to events—the marked feature of what occurred in March 1982 was inaction and indecision—what assurances have we received that that would not recur if there were a crisis in Europe?
Let me take one scenario, although there are others. Instead of the Hungarian crisis in 1956, Czechoslovakia in 1968 and the recent Polish crisis, what if there were a combination of all three? We might know that the Warsaw pact forces were mobilised to deal not with a foreign threat but with internal repression. [Interruption.] I am glad that the hon. Member for Windsor and Maidenhead (Dr. Glyn) agrees, because I was struck by his argument that, had we over-reacted at a certain stage in the Falklands war, it could have been interpreted as an offensive move. That is precisely the dilemma we face over the lowering of the nuclear threshold in the European theatre.
Yesterday, the Prime Minister told us that to have sent three frigates would not have helped. She said that the sending of one or more nuclear submarines would have meant continuing negotiations. She said that a covert presence would not have deterred. In other words, we never had the right thing in the right place at the right time.
How would we deter movement across frontiers in Europe, not, as expected, of Warsaw pact forces, but possibly of other forces crossing frontiers to defend themselves against the Warsaw pact? One thing is certain—there would be no Franks report or two-day postmortem after such a crisis, because in a nuclear holocaust we would all be dead.
The inability of the Government to have an adaptable and appropriate response for the Falklands is one of the key features of the Franks report. In their view it was either all-out war or nothing. Those are the two options that they considered they faced. But that will be our peril if we translate the same options into the European theatre.
What is the record overall? It is too little, too late, on the Government side. Instead of a resolute approach, the Government were irresolute, indecisive and, in key respects, by failing to act on information, incompetent. When she needed to act, the "iron lady" had her feet off the floor. She was saved only by the courage and commitment of the armed forces. She has made a mess of the economy and now a mess of the Falklands. This report and debate are not the jewel in her crown; they could well be the beginning of the end of her Government.

9 pm

Mr. David Crouch: This is not the time for recrimination. It is a time for short speeches. I found the Franks report fascinating. I have read it twice. One needs to read it twice to read between the lines. I enjoyed having the advantage of hindsight. I wish that I had known all the facts a long time ago. As a Back Bencher, I feel very much wiser now about events in the South Atlantic. Over the past 17 years I have seen many reports, read so much advice and so many warnings, and they are all in the Franks report.
There is more to come, because surely the 30-year rule has been broken. In the year 2012 there will be a great deal more. Diaries and an autobiography may be written and published. I suggest that by then it will be history and academic, if it is not already.
This debate has been reflective. We have been raking over the ashes. Why? To see where we went wrong and to see what lessons are to be learnt from this tragic episode.
The Franks report is largely about Ministers and their advisers—what they said and did, and what they did not do during the past 17 years. There is little in the Franks report about Parliament, yet Parliament, like the islanders, seems to have been one of the principal stumbling blocks to finding a resolution to the problem. We did not know enough. We were consulted occasionally. We were said to be hostile, and so were the islanders when they were consulted, but was that not worth a little more attention from successive Governments? Parliament may be supreme, but I suggest that our attitude over the Falkland Islands has been superficial.
Lord Carrington knew that. He knew that he would have to carry the House, public opinion and the islanders with his propositions to find a solution if his studied approach was to be understood and eventually accepted. My right hon. Friend the Minister of State, Foreign and Commonwealth Office knew that and believed that an education programme was needed. It has been referred to in the report. Our ambassador in Buenos Aires knew and called it "a sales campaign." I am afraid that we did not have it. We probably would not have swallowed it, and Lord Carrington was probably right in assuming that perhaps it was not worth while pursuing, because opinion in the country was not prepared to accept anything that would have allowed the ceding of sovereignty to a country which my hon. Friend the Member for Essex, South—East (Sir B. Braine) described, and was referred to in the Franks report, as having an appalling record in human rights.
Parliament is supreme. In the end, it is votes in Parliament that count. Parliament should have been given another chance. The Government, and previous Governments, did all that they could to find a solution. I do not accept that a larger military presence would have helped the efforts to reach a solution by diplomatic means. It might have been counter-productive. However, we should not have allowed the Argentines to believe that we in Great Britain and Parliament did not care about what went on 8,000 miles away in the South Atlantic.
I believe that Parliament should have been brought into the act. That is the lesson that I have learnt from reading the Franks report so closely. Parliament should have been more inquiring about our position in the south Atlantic. We should have counted the cost and the consequences of failure to find an answer. But we did not press any Government, and no Government exactly pressed us. It is not so today.
Today we have a Select Committee on Foreign Affairs. As has properly been said by my hon. Friend the Member for Shoreham (Mr. Luce), by Lord Greenhill of Harrow yesterday in the other place, and others, the Select Committee could have been invited to examine the problem by the Government. At the end of the day it would have reported, but it would have looked at the problem in great depth. That is the difference between then and now. Today Parliament is more inquiring and has more capability to inquire. It wants to know, it needs to know, and it must know more detail. It really wants to have the opportunity of Franks all the time, but not after the event.
I conclude on the simple and single point about a Select Committee. If one had existed in the 10 or 12 years before the crisis, I believe that we should have been reading its version of the Franks report, not with hindsight, but at least with the foreknowledge of a real crisis that could have emerged and could not be left on the shelf for long.

Several Hon. Members: rose—

Mr. Speaker: The winding-up speeches should start now, but will be postponed until 10 minutes past nine.

Mr. Gavin Strang: In the five minutes that remain to me I shall endeavour to make only three points.
First, I believe that the central issue in relation to the Falkland Islands conflict is the fact that the Falklands are a relic of Britain's imperial past. It is monstrous that we should sacrifice Service men's lives and spend thousands of millions of pounds to defend them into the indefinite future. It was an act of unprovoked aggression by the Argentine junta, but I believe that to recapture the islands by force was politically and militarily wrong. Nothing has happened since to make me change my mind.
Secondly, I believe that history will condemn this Government in particular for their refusal to accept the negotiated settlement on offer in the closing days before the recapture and our troops landed on the Falkland Islands. Under United Nations auspices agreement was available on the basis of a complete withdrawal of Argentine forces, an interim United Nations administration and negotiations without prejudging the sovereignty issue. That fact is in the Government's document and it is in a letter that I received from the Minister of State, Foreign and Commonwealth Office.
The reasons given by the Government in that tawdry document, the report of the negotiations, for not accepting those terms are wholly inadequate when we see that the alternative was to press ahead with the military action which was at best a dangerous exercise and which involved the loss of many lives and was bound to do so. [Interruption.] I see the Foreign Secretary shaking his head. Let me give him one quotation from the letter from the Minister of State, the hon. Member for Woking (Mr. Onslow), with reference to the question of prejudging the sovereignty issue:
The Argentine response to our proposals given to them on 17 May suggested only that negotiations on the future of the Islands should be initiated without prejudice to the rights, claims and positions of the two parties.
That was the position.

Mr. Pym: The Argentines flatly refused to have anything to do with it.

Mr. Strang: No. I think that the right hon. Gentleman's statement does not square with the report of the negotiations that the Government published. Time does not allow me to quote from the Government's document.
What are the lessons from the Falklands episode? First, successive British Governments and Parliaments should have recognised that there was no long-term future for the islands under British sovereignty and proceeded to negotiate a settlement that accepted that and secured the best possible deal for the islanders.
My right hon. Friend the Leader of the Opposition rightly focused attention on the importance of the United


Nations throughout the affair. The United Nations General Assembly in 1965 passed a resolution urging the Argentine and British Governments to get together to negotiate a settlement on the issue. The important issue is not what the Government did in advance of the invasion but what they did after the invasion. The real lessons to be learnt are the failures of successive Governments in advance of the Argentine invasion of the islands.
I hope that the Foreign Office is looking carefully at some of our other dependencies, some of the other relics of our imperial past, so that we can avoid further tragic loss of Service men's lives and further indefensible commitments of resources and expenditure in the future.
What of the future for the Falklands? We have the worst of all worlds. We have lost so many lives so tragically. We are committed to spending thousands of millions of pounds into the future. The position is worse than when we started, because we do not even have the basis for the most important element of the economic development of the islands—a regular air service between the South American continent and the Falklands.
This whole episode has damaged Britain's interests. The real issue is how quickly will the present Government or any British Government have the statemanship to reopen negotiations and secure a settlement before more British lives are tragically lost.

Mr. John Silkin: There have been many powerful and important contributions to this long debate, and, if he will permit me to say so, none more powerful and none more important than that of my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), the former Prime Minister. But, at the end of the debate, we are left with the basic question: could the invasion of the Falklands by the Fascist junta of Argentina have been prevented? In my view, the answer is "Yes".
The right hon. Member for St. Ives (Sir J. Nott), in effect, said to us "Why debate this issue now? Forget the past; it is the future alone that concerns us." I believe that everyone has a duty to give the best judgment he can on the events that led up to the Falklands war. To do otherwise would be to ignore, indeed to betray, the young people who lost their lives or were wounded in the South Atlantic, and their relatives and friends. British or Argentine, they were the ones who suffered.
Among those young people was one young man, a lieutenant in the Royal Navy called David Tinker. He was killed in HMS Glamorgan when an Argentine Exocet hit the ship. He was only 25. The letters that he wrote home are vivid and evocative. He wrote about what he believed to be the reasons for the war. He wrote:
This one is to recapture a place which we were going to leave undefended from April and to deprive its residents of British citizenship in October, and to recapture it, having built up their forces with the most modern Western arms (not even we have the air-launched Exocet which is so deadly) and fighting ourselves without two of the pre-requisites of naval warfare, air cover and airborne early warning which have been essential since world war 2.
Those are powerful criticisms and would deserve in any event to be considered, but coming as they do from this young man who died, we have a double duty to examine the accusations he makes.
David Tinker made much of the fact that we and our allies built up and equipped the Argentine forces. My hon. Friend the Member for Harlow (Mr. Newens) yesterday

gave a frightening list of equipment that the Argentines received from us. In fact, they are still being armed by us, as my hon. Friend told us. The Rolls-Royce engines that are being supplied to the six frigates in Hamburg in Germany are destined for Argentina. As the Foreign Secretary pointed out this afternoon, Argentina has not ceased hostilities. Why then are the Argentines still being armed by us?
If it was wrong, and I believe it was, for any Government to have supplied Argentina with arms in the past—all Governments were to blame for that—from the moment that the unilateral communiqué was issued on 1 March 1982, it became, to my mind, criminally negligent to do so. Yet arms were being supplied even to the moment when Argentina invaded.
David Tinker's other criticism was that the war was about recapturing British possessions that the Government had intended to leave undefended. In September 1980 Lord Carrington minuted the Prime Minister on his three alternatives—Fortress Falklands, protracted negotiations with no concession on sovereignty, or substantial negotiations on sovereignty. The option that everyone, including the Government, rejected was Fortress Falklands. The Prime Minister fairly told us yesterday that short of Fortress Falklands it was impossible completely to guarantee the safety of the islands from military aggression. If that is so, why as late as 3 February 1982, seven weeks before the invasion, did the Prime Minister write to Mrs. Madge Nicholls of Gerrards Cross that
our judgment is that the presence of the Royal marines garrison is sufficient deterrent against any possible aggression"?
Did the right hon. Lady really believe that the presence of a Royal Marines garrison comprising 42 men could possibly prevent the islands being invaded? This is puzzling, especially in view of what she said yesterday. Incidentally, I find it almost incredible that the Franks tribunal, composed of so many able and intelligent men, should not have thought it worth while to consider the Prime Minister's letter to Mrs. Nicholls, bearing in mind its clear relevance to the events of the time.
The Prime Minister has been asked about the letter to Mrs. Nicholls on a number of occasions. I recall well the occasion when she was asked about it by my right hon. Friend the Leader of the Opposition. She has chosen never to reply to these questions. I hope that by now she will have thought of a convincing answer and will enlighten us when she replies.

Mr. Geoffrey Dickens: rose—

Mr. Silkin: No, I shall not give way. I do not have time to do so.
There was always the possibility of an Argentine invasion but it was considered that the time scale would be relatively slow, that it would come in stages and that the right hon. Lady would have plenty of warning before she needed to take action. The aggression of 2 April came, as the right hon. Lady has said, "out of the blue". However, she should have been well aware of the danger of an Argentine invasion. The warnings were there in the papers that she should have read.
As early as 12 October 1979 Lord Carrington sent the right hon. Lady a memorandum demanding a discussion during the following week. He had already been pressing for a decision on policy since 20 September 1979 but the Prime Minister had decided that the matter "could not be rushed". In October 1979 Lord Carrington wrote:


If Argentine concluded that there was no prospect of real progress towards a negotiated transfer of sovereignty there would be a high risk of its resorting to more forceful measures, including direct military action.
The Prime Minister's reaction to that powerful warning of "direct military action" was to postpone all discussion of the Falklands by the Defence Committee until January 1980. Yet additional confirmation was coming in the whole time to her that the Falklands issue was becoming urgent. In November 1979 the JIC warned that if the British Government were not prepared seriously to negotiate on sovereignty
There was a high risk that strong military action against the Falklands Islands could not be discounted.
By January 1980 Lord Carrington was also warning his colleagues that
to continue to stall could be risky".
It is interesting that he used the word "risky".
On 29 January 1980—two months after the warnings from the JIC—the Prime Minister finally got round to considering the problem that had lain on her table for four months. It was agreed that continuing the Labour Government's approach should be rejected and that further talks with the Argentines should be held. But between January and July 1980 the Prime Minister appears to have forgotten all about the subject until it was agreed in July to reach a solution on the basis of a lease—back arrangement.
When the Financial Secretary to the Treasury was sent to the Falklands in November 1980 to discuss a lease-back with the islanders, he appeared to be under no illusions about the dangers. I recently watched a television programme in which Mr. Terry Peck, a leading islander, appeared. According to Mr. Terry Peck, when the Financial Secretary to the Treasury was in the Falklands, he warned Falklanders on more than one occasion that if they did not agree to sovereignty going to Argentina the Argentines might use military force to capture the islands.
Therefore, within the Foreign and Commonwealth Office, within the Government, there is no doubt that Ministers were saying that there was a danger that the Argentines might invade. Surely the Prime Minister must have been aware of that or was she not on speaking terms with her Ministers? From that point onwards, the report shows that the Prime Minister received no fewer than six further warnings, either from the Foreign and Commonwealth Office or from the JIC, about the military danger from Argentina. If she refused to believe any of those warnings, she should at least have believed General Galtieri.
During the spring and summer of 1981, General Galtieri was commander-in-chief of the Argentine army. He deliberately chose army day—a significant occasion—in 1981 to threaten Britain by saying that after a century and a half the Falklands issue was becoming intolerable. Did not the Prime Minister appreciate the significance of that?
There can be no doubt that time and again the Prime Minister was warned that Argentina might be considering undertaking a military conflict. On each occasion she ignored the warning or temporised. She failed to insure against the risk, the high risk as it had been described.
The total identification with the people of the Falklands that the Prime Minister now purports to have did not exist in those critical months. Indeed, it was worse. The signals

that were being sent out to the Argentine Government, almost from the moment that she took office, were that the Prime Minister did not mind what happened to the Falklands and that, in any event, there was not the slightest possibility that we would do more than put up a token defence if the islands were invaded.
It is in that context that the issue of HMS Endurance arises. Franks devotes no fewer than five long consecutive paragraphs to HMS Endurance. The Foreign and Commonwealth Office was well aware that the decision to withdraw HMS Endurance would be seen in Argentina as a sign that Britain was no longer interested in the islands. The islanders certainly knew that, as my right hon. Friend the Leader of the Opposition pointed out yesterday. On 26 June 1981, they sent a message to Lord Carrington that was phrased in the strongest possible terms. It included the following sentence:
They feel that such a withdrawal will further weaken British sovereignty in this area in the eyes not only of the islanders but of the whole world.
The then Secretary of State for Defence was adamant that HMS Endurance had to go despite Lord Carrington's many attempts to get the decision cancelled. I am sorry that the right hon. Member for St. Ives is not present. He said today that he had to weigh up the cost of maintaining HMS Endurance against the cost of maintaining a frigate. We lost three frigates in the war. However the Prime Minister may try to dodge the responsibility, it remains firmly with her. In the conflict between the Foreign Secretary and the Secretary of State for Defence, which continued over a long period, she sided with the Secretary of State for Defence. She could hardly have been ignorant of the feeling in the House. Several early-day motions were tabled on the subject, one of which was signed by more than 150 hon. Members.
On 9 February 1982 the right hon. Lady was tackled about the decision to withdraw and pay off Endurance by my right hon. Friend the Member for Cardiff, South-East. It was not hindsight. I know that my right hon. Friend will forgive me for saying that it was not even foresight. It was plain common sense. He warned that the consequences in the south Atlantic could be serious. The Prime Minister considered the issue and, faced with a bill for £3 million, asserted that other claims on the defence budget had greater priority. That assertion was not lost on the Fascist junta in Buenos Aires.

Sir Victor Goodhew: The right hon. Gentleman is saying that the decision on Endurance was enough to invite the junta to attempt a landing on the Falkland Islands. How does he reconcile that with his view—and the view of the Labour party—that the British nuclear deterrent should be abandoned? What effect would that have on Russia?

Mr. Silkin: Perhaps the hon. Gentleman should read the Franks report. If I am allowed to progress, he will realise that I am not talking only about Endurance. The Fascist Government of Argentina was guilty of aggression on 2 April 1982, and there is no disputing that. Nothing can excuse that action. But, however mistaken, it is not surprising that they came to believe that such aggression would not be resisted by the British Government. As early as July 1981, the Argentine press had interpreted the withdrawal of Endurance as showing that
Britain was abandoning the protection of the Falkland Islands.


That was the very conclusion that the islanders anticipated in their message of 26 June, and against which my right hon. Friend the Member for Cardiff, South-East warned so forcefully in February 1982.
There were other signs—perhaps the hon. Member for St. Albans (Sir V. Goodhew) will listen to them—about which the governor wrote on 19 January 1982 in his annual report to the Foreign Office. He listed three signs, including the decision to scrap Endurance. He specifically mentioned the cuts in the Antarctic survey and the threatened closure of Grytviken in South Georgia. But the point is not how suspicious the islanders may have been. As my right hon. Friend the Member for Cardiff, South-East reminded us, the clear signals received in Buenos Aires were that the Conservative Government—unlike their predecessors—no longer wished to protect the islands. One of those signals was the defence review with its slashing of the Navy, including the projected sale of Invincible.
Yesterday the Prime Minister quoted the 1981 paper from the chiefs of staff. She said that it concluded that
to deter a full scale invasion, a large balanced force would be required"—
that is the important point—[Interruption.] I hope that the Home Secretary will not object to my continuing with my speech. The paper continued
comprising an Invincible class carrier with four destroyers or frigates plus possibly a nuclear powered submarine, supply ships in attendance and additional manpower up to brigade strength, to reinforce the garrison."—[Official Report, 25 January 1983; Vol. 35, c. 801.]
The important point is that the list included an Invincible class carrier, and the Prime Minister had already decided to sell Invincible. By selling Invincible, she would have made it impossible for the task force to sail on 2 April, and we all know that if General Galtieri had waited for just six months the Falklands would now be lost for ever.
On many occasions in the past, when faced with Argentine threats, British Governments have immediately increased their defences. Winston Churchill and Clement Attlee did so, and in 1977 my right hon. Friend the Member for Cardiff, South-East did so, too. The Prime Minister followed none of those leads. She chose the path of vacillation and dither. That was the choice most likely to lead to a military adventure by the Argentines. It was the choice most likely to realise the worst fear of the intelligence assessment of July 1981—the fear that Argentina would conclude that there was no hope of a peaceful transfer of sovereignty, and that in those circumstances a full-scale invasion of the islands could not be discounted. Such an invasion could be made with a minimum of warning and could lead only to the bloodshed, the losses of brave men, ships and aircraft, and the bitter and costly aftermath of war that we have seen and are seeing today.
On page 84 of the report, the Franks committee describes the difficulties of closely monitoring Argentine preparations for invasion. The committee concludes that the operational problems and the large areas of Argentine coastline and hinterland made it impracticable for the intelligence agencies to provide earlier warning of what it believes to have been a last-minute decision to invade on 2 April.
I accept that, but two things surely follow of which the committee made no mention. First, however late the final decision, the invasion could not have been mounted in a day. The logistics must have required weeks of preparation

and of concentration of forces. Secondly, even if the limitations of our intelligence were so great that those preparations could be made in peacetime without the knowledge of our intelligence agencies or our diplomats, it is impossible to believe that the Foreign and Commonwealth Office was unaware, and failed to make its political masters aware, that an invasion could come out of the blue without warning or foreknowledge. There is nothing in the report to show that the committee asked the question or even considered it, but I ask it now and the House is entitled to an answer. Was the Prime Minister aware that the Falklands could be occupied with any foreknowledge on our side? Did she ask, as she clearly should have asked at least as early as July 1981, how much warning she would have? If she knew the truth, it was knowledge of vital importance to the decisions of Government at any time when invasion was an available Argentine option. If she did not know, only her incompetence can explain that fact.
The Prime Minister has taken upon herself the image of one who can do no wrong. She thinks, as was said in The Economist last week, that she can walk on water. She presents herself as saddled with a Cabinet of weaklings, who have to be told exactly what to do. She is the presiding genius who alone, in the end, has to make all the vital decisions, such as coming home from the Falklands to rescue the pound.
The reality is a story of dither and postponement and failure to read or understand the papers. Some day there will have to be a change. Some day our fences with Latin America will have to be mended. Some day reconciliation will have to be the key word. Fortunately, it will fall to someone other than the right hon. Lady to undertake that task.

The Prime Minister (Mrs. Margaret Thatcher): Throughout this two-day debate there has been total agreement on both sides of the House that the campaign itself was brilliantly conducted and bravely fought. One was grateful throughout that time for the total support of hon. Members from all parts of the House.
We listened with particular interest to the speeches of my right hon. Friend the Member for Spelthorne (Mr. Atkins) and my hon. Friend the Member for Shoreham (Mr. Luce), who both resigned when the invasion occurred because they believed that it was the right and honourable thing to do.
I shall comment on one or two of the things said by the right hon. Member for Deptford (Mr. Silkin). At the beginning of his speech he commented upon selling arms to Argentina. I can only remind him that both this Government and his have been responsible for that. I have a list: eight ex-RAF Canberras were sold to Argentina in 1968, two type 42 destroyers were contracted in May 1970 and two Lynx helicopters in January 1976. Both Governments sold Sea Dart surface-to-air missiles. We have both been guilty of selling arms to Argentina. Both of us tried to cultivate friendly relations with the Argentines. Franks said that he thought that that was part of a signal to the Argentines, but we were both trying steadily to get closer relations with them and to co-operate more with them.
The right hon. Members for Deptford and for Leeds, East (Mr. Healey) referred once again to HMS Endurance.


The right hon. Member for Leeds, East quoted what Lord Carver said about Endurance. I shall complete that quotation. He said:
Let us remember that 'Endurance' was not withdrawn. 'Endurance' was there and had not the slightest effect upon the invasion".—[Official Report, House of Lords, 25 January 1983; Vol. 438, c. 178.]
That is the fact of the matter. The right hon. Member for Deptford has spent a great deal of time talking about Endurance. Obviously, I wish that we had kept it. In fact, we have kept it. I wish that we had said that we would keep it, as my right hon. Friend the Secretary of State for Defence indicated, and as I thought I had indicated when I opened the debate yesterday.
We were not the first Government to say in a defence review that we would no longer keep Endurance in deployment. Having made that decision, nor were we the first Government to go back on it and say that it would stay. The fact was that Endurance was always going to stay until the end of that summer. She would always have been deployed until the middle of April. There was never any question of her leaving before then. The fact is also that Endurance is there for only about four months of the year, after which she comes back to this country and goes down again for the summer months. As Lord Carver said, Endurance was there when the invasion occurred. It was there previously when shots were fired across the bows of the RRS Shackleton. She was not a deterrent. However, she will remain deployed during those months of the year.
The right hon. Members for Deptford and for Leeds, East commented that the task force could not have been assembled by the end of the year. It is not the case that the task force could not have sailed by the end of 1982. HMS Invincible would still have been in the Royal Navy. She was not due to be handed over to the Australians until late 1983, so she would still have not been handed over and the task force could still have sailed this year. The assault ships HMS Fearless and HMS Intrepid had already been reprieved, as the former Defence Secretary told the House on 8 March, by the time of the Argentine invasion. By the time that HMS Invincible would have been due to go to the Australians, HMS Illustrious and HMS Hermes would both have been on station, with HMS Ark Royal coming in later. It is not true that the task force could not have sailed later.
The right hon. Member for Deptford made some comment, as did the right hon. Member for Plymouth, Devonport (Dr. Owen), about the paramountcy of the islanders' wishes. I hope that there will be no change in policy about this, because the policy has been the same for many years. At the beginning of the Franks report it is said that the then Michael Stewart, now Lord Stewart, made a statement in the House following the end of the first round of negotiations in which Lord Chalfont was involved. Those were terminated, but fresh ones had started and Mr. Stewart made a statement to Parliament
which announced the decision to continue negotiations and which confirmed that the British Government would continue to insist on ther paramountcy of the Islanders' wishes.
That was in 1968.
The right hon. Member for Stepney and Poplar (Mr. Shore), in his cross-examination of my right hon. Friend the Financial Secretary on 2 December 1980, made it clear that he, and I therefore assume his party, still believed in the paramountcy of the islanders' wishes. He said:

The Minister was asked a few moments ago whether, if the islanders were to opt for the status quo, that would then be the Government's view on the matter and they would sustain it. He did not give clear reply to that. If the Government are to honour their commitment that the views and wishes of the Falkland Islanders are to be paramount, which is the word which has been used hitherto, he must assure the House and the Falkland Islanders that the principle of paramountcy of their wishes about their future will be sustained by the British Government"—[Official Report, 2 December 1980; Vol. 995, c. 134.]
I think that the right hon. Member believed that, and when the campaign began I think that I heard the right hon. Member for Leeds, East say that the Labour party still believed in paramountcy. I hope that no one is trying to slide out of it now. It is fundamental to the islanders' belief.
I noticed that there was one occasion on which the right hon. Member for Devonport did not use the word when he made a statement to the House, and used the word "consult" instead. When the islanders rejected the scheme to have joint co-operation on scientific work on another dependency in addition to Southern Thule, saying that there would be Argentine occupation of South Georgia and Southern Thule, the right hon. Gentleman accepted that, and the negotiations broke down. That was not the only time that the negotiations broke down. Sometimes Labour Members have spoken as if there have been negotiations all the time. That was not so, and there were times when they broke down completely.
The right hon. Member for Leeds, East quoted Lord Hill-Norton as saying that £10 million would have been sufficient to deter. I cannot imagine what anyone thinks £10 million would have bought in terms of deterrence, compared with the enormous number of things that were needed on the islands, and which we are now having to carry out to deter properly.
Both the right hon. Member for Deptford and the right hon. Member for Cardiff, South-East (Mr. Callaghan) referred to the warning to Galtieri and suggested that I might have done something stronger than get on to the President of the United States. However, by the time that we did that, diplomatic relations had virtually broken down because of the incident on South Georgia. The relationship between our ambassador there and Costa Mendez was such that Costa Mendez was saying that the diplomatic channel was closed.
The right hon. Gentlemen will also know, and the evidence is cited throughout the report, that the Argentines attach enormous importance to their relationship with the United States, which they had continuously been cultivating for a considerable time. It seemed to be obvious to get on to the most powerful President in the world, of whom they thought highly and with whom they were trying to achieve closer relations.
It was absolutely right, under those circumstances, to get on to President Reagan. The sequence of events was very interesting. After putting representations through the United States' ambassador in Buenos Aires, President Reagan himself tried to telephone President Galtieri. It is interesting that President Galtieri refused to take that telephone call for some four hours. It was thought afterwards, as information reached us, that this was the four hours in which the junta was meeting and deciding, come hell or high water, that it was going to invade. It was only after that that Galtieri took the telephone call from President Reagan who was on to him for nearly an hour and told him in no uncertain terms that Britain would


regard this as a casus belli. The right hon. Member for Leeds, East had fun with that. I doubt whether there is anyone who does not know, in that position, what a casus belli means. Galtieri knew full well what it meant.
President Reagan also said that it would have a great effect on Argentina's relations with the United States, which Argentina valued, as we now know that it did. It was only the headlong determination of the junta to invade that caused Galtieri to reject President Reagan's pleas and also caused him to reject President Reagan's offer to send Vice-President Bush down there to try to find a solution to the problem. The junta was absolutely determined to invade. Nothing, but nothing, would deflect it from its course of action.
A number of hon. Members have analysed carefully the position as it was in early March long before the South Georgia incident. The South Georgia incident started on 19 March. It was not serious for some time because, after Argentina had put its people on to South Georgia at Leith, the next news was that it had taken a large number off. Many hon. Members have focused on the period in early March as the turning point. They have tried to show that there was clear evidence that a crisis was upon us, that Argentina had given up hope of negotiation, that it should have been assumed that Argentina was turning to the military option then and therefore that immediate military dispositions should have been made.
That has substantially been the argument. It seems to me that those who mount the argument fall headlong into the trap that Lord Franks wisely avoided—the trap of hindsight. Those who use that argument start from the point that the invasion occurred on 2 April. They have looked for any sentences in the report that could possibly bear on that point. They cite selectively the final paragraph of the JIC report in 1981 to build up a picture suggesting that the Government should have known that an invasion was imminent and that they should therefore have dispatched ships. The argument simply does not hold water.
The true sequence of events is clear from the report. Talks had been held in New York in February 1982. The report, as many hon. Members have noted, compliments my hon. Friend the Member for Shoreham on his conduct of the talks. There was first a joint communiqué recording that the meeting took place in a cordial and positive spirit and that both sides reaffirmed their resolve to find a solution to the dispute. Then a unilateral communiqué was issued in Buenos Aires upon which much comment has centred. Undoubtedly, this represented a hardening of Argentina's attitude. I gave many instances yesterday of previous hardening of Argentine attitudes. The Government fully recognised that at the time. The Buenos Aires communiqué recorded the proposal made in New York to establish a system of monthly meetings. The unilateral communiqué described the system as an effective step for the early solution of the dispute. That does not sound like negotiations breaking down.

Mr. Dalyell: If it is a matter of hindsight, why did the Prime Minister in her own handwriting—according to paragraphs 152 and 147—write on the telegram to the ambassador in Buenos Aires:
we must make contingency plans"?

The Prime Minister: I am grateful to the hon. Gentleman. I am coming to that precise point.
There was a press campaign in Buenos Aires, as there had been on several previous occasions, and it is that to which the hon. Gentleman is referring. Again, using hindsight selectively, that has been portrayed as another clear warning of imminent invasion. It was not so. An Argentine Government source was quoted
as saying that parallel plans had been formulated in case the proposed meetings did not produce sufficient progress towards a solution
—again a reference to negotiations. [Interruption.] This is what the report says in paragraph 139, and the hon. Gentleman should read it:
These included recourse to the United Nations and the breaking off of economic and political relations. The source preferred, however, 'at the moment' to discount suggestions of Argentina's using force to resolve the dispute".
The famous article in La Prensa
speculated … that, if present tactics were unproductive, a first step might be to cut off services to the Islands followed by a progressive cooling of bilateral relations".
The report went on to say that in the longer run
There would be no flexibility in Argentina's minimum demand for restitution of sovereignty before the 150th anniversary",
and that is why I wrote on the top of the telegram
we must make contingency plans".
Let me say this to the hon. Gentleman. It seems that a number of hon. Members think that just because one writes to the chiefs of staff and says that we must make contingency plans they could overcome all the fundamental geography or the fundamental fact that the islands are 7,000 miles away and that one can only reinforce them from Ascension.

Mr. Dalyell: rose—

The Prime Minister: No. The fact was—[Interruption.]

Mr. Speaker: Order.

The Prime Minister: The fact was, and the report refers to it, that
no Government was prepared to establish a garrison on the Falklands large enough to repel a full-scale Argentine invasion, or to provide an extended runway for the airfield, with supporting facilities
and without that it was not possible to have a rapid contingency plan that would have overcome all the geography. The right hon. Gentleman's Government did not. We did not. We needed a full airfield, a full airstrip, fully defended, fully equipped with aircraft, and a full garrison in residence to have effective contingency plans. It is absolutely a travesty and thoroughly misleading to suggest that merely by sending a nuclear submarine and a couple of frigates one could have overcome all of the difficulties to which the chiefs of staff referred time and time again—time and time again—in the four papers that are referred to in the report, which were all similar, and which all had the warning "If you are going to deter without that you will have to send a full aircraft carrier force and that might not be enough when you get there. Therefore you need a very much larger task force." That, eventually, is what we had to send. I said yesterday that to make effective contingency plans we should have had to send 104 ships and 26,000 men, but I doubt whether Opposition Members would ever have accepted that. [Interruption.]

Mr. Dalyell: rose—

Mr. Foulkes: rose—

The Prime Minister: I want to say a word about the future. [Interruption.] That is totally and absolutely untrue, and I must ask the hon. Member to withdraw. [HON. MEMBERS: "Withdraw".]

Mr. Speaker: Order. I did not hear the hon. Gentleman's remark.

The Prime Minister: I think that I, too, then can turn a deaf ear.
Hon. Members on both sides of the House have made use of the phrase "Fortress Falklands" as if it were a policy in itself. It is not. If the Falklands are at present a fortress it is purely and simply a state of affairs caused by the Argentine aggression of 2 April and by our determination that that aggression will not be repeated.
Our policy is to create conditions in which the islanders can live happy, prosperous and free lives under a Government of their choosing. Much time is needed in order to fulfil that policy in all its aspects. There is a great deal to be done to restore normality to the lives of the islanders after the brutal shock of invasion and occupation. From my visit to the islands I can testify to the extent of the disruption and the time and effort that will be needed to re-create normal life and enhance the community's prosperity.
First and foremost, the Argentine Government must commit themselves formally and unequivocally to a cessation of hostilities. That has not happened. Even in the past few weeks we have been exposed to contradictory statements from Buenos Aires and New York, some bellicose and threatening, some denying hostile intent—again, the same double-sided approach. That does not create confidence either for me or, I suggest, the House and the islanders. If and when Argentina makes a clear declaration that hostilities are at an end, there will have to be a period in which I hope that they will be prepared to work towards full normalisation of our bilateral relations. That, too, is bound to take time. Meanwhile, it is obviously premature for either the islanders or ourselves to speculate, as has been done both in the House and in the media, about specific policies for the long-term future.
At this stage I shall say only that I have been urged by certain Labour Members to enter into negotiations with Argentina. About what? It is obvious that the Argentines see negotiations solely as a means of achieving the direct transfer of sovereignty over the Falkland Islands and the dependencies to Argentina. That is totally unacceptable to us and the islanders and no amount of pressure will induce me to enter into negotiations on that basis.
In opening the debate yesterday I reminded the House that within a week of the Argentine invasion I announced that a review would be held of the way in which the Government discharged their responsibilities in the period that preceded 2 April 1982. The Government wanted an inquiry of absolute integrity and independence. Therefore, I sought one of our most distinguished public figures, Lord Franks, as chairman. His name was agreed with the Opposition parties. The right hon. Member for Glasgow, Hillhead (Mr. Jenkins) described him as a man of outstanding ability and experience. I suggested a former permanent secretary, Sir Patrick Nairne, who was also agreed by the Opposition parties. I suggested two Privy Councillors from each of the main political parties. The Leader of the Opposition named two and I proposed two former Conservative Cabinet Ministers. I then suggested

terms of reference and they were agreed by the Opposition. No Prime Minister has ever gone further in submitting a Government's record to scrutiny and investigation.
I always believed that the Government could not have foreseen the invasion and that they could not be blamed for the unprovoked aggression of the Argentine Government, but I was prepared to put that belief under the microscope of an inquiry. No one who has spoken in this debate, and that applies to me as well, has seen or heard more than a fraction of the evidence that was available to that committee. Its composition, its deliberately wide terms of reference, the mass of evidence available to it, and the thoroughness with which the inquiry was conducted give to the Franks report a unique authority. That report exonerates Her Majesty's Government on the two central issues. The invasion of the Falkland Islands could neither have been foreseen nor prevented.
In effect, the Opposition reject the report's findings. They reject a unanimous report which their representatives signed without reservation. Of course, for the right hon. Member for Ebbw Vale (Mr. Foot) the report is a bitter pill to swallow. He pointed out that his noble Friend Lord Lever of Manchester and his right hon. Friend the Member for Leeds, South (Mr. Rees) retained
the right to make their own independent assessment and to produce their own report if they so wish."—[Official Report, 8 July 1982; Vol. 27, c. 477.]
By its amendment tonight, the Labour party is condemned. Just think what the Opposition would be saying if the position were reversed. Just imagine if the Franks report had turned against the Government and I was standing at the Dispatch Box rejecting the findings and quarrelling with the conclusions, refusing to accept the referee's decision. Like the Leader of the Opposition, I agreed the members of the committee and the terms of reference so that an impartial judgment could be made of all that we had done. We placed our reputation in the committee's hands and the Government accept the verdict.

Question put, That the amendment be made:—

The House divided: Ayes 240, Noes 292.

Divison No. 50]
[10 pm


AYES


Abse, Leo
Campbell, Ian


Adams, Allen
Campbell-Savours, Dale


Allaun, Frank
Canavan, Dennis


Alton, David
Cant, R. B.


Anderson, Donald
Carmichael, Neil


Archer, Rt Hon Peter
Carter-Jones, Lewis


Ashley, Rt Hon Jack
Cartwright, John


Ashton, Joe
Clark, Dr David (S Shields)


Atkinson, N.(H'gey,)
Clarke,Thomas(C'b'dge, A'rie)


Bagier, Gordon A.T.
Cocks, Rt Hon M. (B'stol S)


Barnett, Guy (Greenwich)
Cohen, Stanley


Barnett, Rt Hon Joel (H'wd)
Concannon, Rt Hon J. D.


Beith, A. J.
Conlan, Bernard


Benn, Rt Hon Tony
Cowans, Harry


Bennett, Andrew(St'kp't N)
Crowther, Stan


Bidwell, Sydney
Cryer, Bob


Booth, Rt Hon Albert
Cunliffe, Lawrence


Boothroyd, Miss Betty
Cunningham, G. (Islington S)


Bottomley, Rt Hon A.(M'b'ro)
Cunningham, Dr J. (W'h'n)


Bradley, Tom
Dalyell, Tam


Bray, Dr Jeremy
Davidson, Arthur


Brocklebank-Fowler, C.
Davies, Rt Hon Denzil (L'lli)


Brown, Hugh D. (Provan)
Davis, Clinton (Hackney C)


Brown, R. C. (N'castle W)
Davis, Terry (B'ham, Stechf'd)


Brown, Ron (E'burgh, Leith)
Deakins, Eric


Buchan, Norman
Dean, Joseph (Leeds West)


Callaghan, Rt Hon J.
Dewar, Donald


Callaghan, Jim (Midd't'n &amp; P)
Dixon, Donald






Dobson, Frank
McNally, Thomas


Dormand, Jack
McNamara, Kevin


Douglas, Dick
McTaggart, Robert


Dubs, Alfred
Magee, Bryan


Dunnett, Jack
Marks, Kenneth


Dunwoody, Hon Mrs G.
Marshall, Dr Edmund (Goole)


Eadie, Alex
Marshall, Jim (Leicester S)


Ellis, R. (NE D'bysh're)
Martin, M(G'gow S'burn)


Ellis, Tom (Wrexham)
Mason, Rt Hon Roy


English, Michael
Maxton, John


Ennals, Rt Hon David
Maynard, Miss Joan


Evans, John (Newton)
Meacher, Michael


Ewing, Harry
Mikardo, Ian


Faulds, Andrew
Morris, Rt Hon C. (O'shaw)


Field, Frank
Morton, George


Fitch, Alan
Moyle, Rt Hon Roland


Foot, Rt Hon Michael
Newens, Stanley


Forrester, John
Oakes, Rt Hon Gordon


Foster, Derek
Ogden, Eric


Foulkes, George
O'Halloran, Michael


Fraser, J. (Lamb'th, N'w'd)
O'Neill, Martin


Freeson, Rt Hon Reginald
Orme, Rt Hon Stanley


Garrett, John (Norwich S)
Owen, Rt Hon Dr David


George, Bruce
Palmer, Arthur


Ginsburg, David
Park, George


Golding, John
Parker, John


Graham, Ted
Parry, Robert


Grant, John (Islington C)
Pendry, Tom


Grimond, Rt Hon J.
Penhaligon, David


Hamilton, W. W. (C'tral Fife)
Pitt, William Henry


Harman, Harriet (Peckham)
Powell, Rt Hon J.E. (S Down)


Harrison, Rt Hon Walter
Powell, Raymond (Ogmore)


Hattersley, Rt Hon Roy
Prescott, John


Haynes, Frank
Race, Reg


Healey, Rt Hon Denis
Radice, Giles


Heffer, Eric S.
Rees, Rt Hon M (Leeds S)


Hogg, N. (E Dunb't'nshire)
Richardson, Jo


Holland, S. (L'b'th, Vauxh'll)
Roberts, Albert (Normanton)


Home Robertson, John
Roberts, Allan (Bootle)


Homewood, William
Roberts, Ernest (Hackney N)


Hooley, Frank
Roberts, Gwilym (Cannock)


Horam, John
Robertson, George


Howell, Rt Hon D.
Robinson, G. (Coventry NW)


Howells, Geraint
Rodgers, Rt Hon William


Hoyle, Douglas
Rooker, J. W.


Huckfield, Les
Roper, John


Hudson Davies, Gwilym E.
Ross, Ernest (Dundee West)


Hughes, Mark (Durham)
Ross, Wm. (Londonderry)


Hughes, Robert (Aberdeen N)
Rowlands, Ted


Hughes, Roy (Newport)
Ryman, John


Janner, Hon Greville
Sever, John


Jay, Rt Hon Douglas
Sheerman, Barry


John, Brynmor
Sheldon, Rt Hon R.


Johnson, James (Hull West)
Shore, Rt Hon Peter


Johnson, Walter (Derby S)
Short, Mrs Renée


Johnston, Russell (Inverness)
Silkin, Rt Hon J. (Deptford)


Jones, Rt Hon Alec (Rh'dda)
Silverman, Julius


Jones, Dan (Burnley)
Skinner, Dennis


Kaufman, Rt Hon Gerald
Smith, Cyril (Rochdale)


Kerr, Russell
Smith, Rt Hon J. (N Lanark)


Kinnock, Neil
Soley, Clive


Lambie, David
Spearing, Nigel


Lamond, James
Spellar, John Francis (B'ham)


Leadbitter, Ted
Spriggs, Leslie


Leighton, Ronald
Stallard, A. W.


Lestor, Miss Joan
Steel, Rt Hon David


Lewis, Ron (Carlisle)
Stewart, Rt Hon D. (W Isles)


Litherland, Robert
Stoddart, David


Lofthouse, Geoffrey
Stott, Roger


Lyon, Alexander (York)
Strang, Gavin


Lyons, Edward (Bradf'd W)
Straw, Jack


Mabon, Rt Hon Dr J. Dickson
Summerskill, Hon Dr Shirley


McCartney, Hugh
Taylor, Mrs Ann (Bolton W)


McCusker, H.
Thomas, Dafydd (Merioneth)


McDonald, Dr Oonagh
Thomas, Jeffrey (Abertillery)


McElhone, Mrs Helen
Thomas, Dr R.(Carmarthen)


McKay, Allen (Penistone)
Thorne, Stan (Preston South)


McKelvey, William
Tilley, John


MacKenzie, Rt Hon Gregor
Tinn, James


Maclennan, Robert
Torney, Tom





Varley, Rt Hon Eric G.
Willey, Rt Hon Frederick


Wainwright, E. (Dearne V)
Williams, Rt Hon A.(S'sea W)


Wainwright, H.(Colne V)
Williams, Rt Hon Mrs(Crosby)


Walker, Rt Hon H.(D'caster)
Wilson, Gordon (Dundee E)


Warden, Gareth
Wilson, Rt Hon Sir H.(H'ton)


Watkins, David
Wilson, William (C'try SE)


Weetch, Ken
Winnick, David


Wellbeloved, James
Woodall, Alec


Welsh, Michael
Wright, Sheila


White, Frank R.
Young, David (Bolton E)


White, J. (G'gow Pollok)



Whitehead, Phillip
Tellers for the Ayes:


Whitlock, William
Mr. James Hamilton and


Wigley, Dafydd
Mr. Ian Evans.


NOES


Adley, Robert
Douglas-Hamilton, Lord J.


Aitken, Jonathan
du Cann, Rt Hon Edward


Alexander, Richard
Dunlop, John


Alison, Rt Hon Michael
Dunn, Robert (Dartford)


Amery, Rt Hon Julian
Dykes, Hugh


Ancram, Michael
Eden, Rt Hon Sir John


Arnold, Tom
Edwards, Rt Hon N. (P'broke)


Aspinwall, Jack
Eggar, Tim


Atkins, Rt Hon H.(S'thorne)
Elliott, Sir William


Atkins, Robert(Preston N)
Emery, Sir Peter


Baker, Kenneth(St.M'bone)
Eyre, Reginald


Baker, Nicholas (N Dorset)
Fairbairn, Nicholas


Banks, Robert
Faith, Mrs Sheila


Beaumont-Dark, Anthony
Farr, John


Bendall, Vivian
Fenner, Mrs Peggy


Benyon, Thomas (A'don)
Finsberg, Geoffrey


Benyon, W. (Buckingham)
Fisher, Sir Nigel


Best, Keith
Fletcher, A. (Ed'nb'gh N)


Bevan, David Gilroy
Fletcher-Cooke, Sir Charles


Biffen, Rt Hon John
Fookes, Miss Janet


Biggs-Davison, Sir John
Fowler, Rt Hon Norman


Blackburn, John
Fox, Marcus


Blaker, Peter
Fraser, Rt Hon Sir Hugh


Body, Richard
Fraser, Peter (South Angus)


Bonsor, Sir Nicholas
Fry, Peter


Boscawen, Hon Robert
Gardiner, George (Reigate)


Bottomley, Peter (W'wich W)
Gardner, Sir Edward


Bowden, Andrew
Garel-Jones, Tristan


Boyson, Dr Rhodes
Gilmour, Rt Hon Sir Ian


Braine, Sir Bernard
Glyn, Dr Alan


Bright, Graham
Goodhart, Sir Philip


Brittan, Rt. Hon. Leon
Goodhew, Sir Victor


Brooke, Hon Peter
Goodlad, Alastair


Brotherton, Michael
Gorst, John


Browne, John (Winchester)
Gow, Ian


Bruce-Gardyne, John
Gower, Sir Raymond


Bryan, Sir Paul
Gray, Rt Hon Hamish


Buchanan-Smith, Rt. Hon. A.
Greenway, Harry


Buck, Antony
Griffiths, E.(B'y St. Edm'ds)


Budgen, Nick
Griffiths, Peter (Portsm'th N)


Bulmer, Esmond
Grist, Ian


Burden, Sir Frederick
Grylls, Michael


Butcher, John
Gummer, John Selwyn


Carlisle, John (Luton West)
Hamilton, Hon A.


Carlisle, Kenneth (Lincoln)
Hamilton, Michael (Salisbury)


Carlisle, Rt Hon M. (R'c'n)
Hampson, Dr Keith


Chalker, Mrs. Lynda
Hannam, John


Channon, Rt. Hon. Paul
Haselhurst, Alan


Chapman, Sydney
Hastings, Stephen


Churchill, W. S.
Havers, Rt Hon Sir Michael


Clark, Hon A. (Plym'th, S'n)
Hawksley, Warren


Clark, Sir W. (Croydon S)
Hayhoe, Barney


Clarke, Kenneth (Rushcliffe)
Heath, Rt Hon Edward


Clegg, Sir Walter
Heddle, John


Cockeram, Eric
Henderson, Barry


Colvin, Michael
Heseltine, Rt Hon Michael


Cope, John
Hicks, Robert


Corrie, John
Higgins, Rt Hon Terence L.


Costain, Sir Albert
Hogg, Hon Douglas (Gr'th'm)


Cranborne, Viscount
Holland, Philip (Carlton)


Critchley, Julian
Hooson, Tom


Crouch, David
Hordern, Peter


Dickens, Geoffrey
Howe, Rt Hon Sir Geoffrey


Dorrell, Stephen
Howell, Rt Hon D. (G'ldf'd)






Hunt, David (Wirral)
Meyer, Sir Anthony


Hunt, John (Ravensbourne)
Miller, Hal (B'grove)


Hurd, Rt Hon Douglas
Mills, Iain (Meriden)


Irvine, RtHon Bryant Godman
Mills, Sir Peter (West Devon)


Irving, Charles (Cheltenham)
Miscampbell, Norman


Jenkin, Rt Hon Patrick
Mitchell, David (Basingstoke)


Johnson Smith, Sir Geoffrey
Moate, Roger


Jopling, Rt Hon Michael
Monro, Sir Hector


Joseph, Rt Hon Sir Keith
Montgomery, Fergus


Kaberry, Sir Donald
Morgan, Geraint


Kellett-Bowman, Mrs Elaine
Morris, M. (N'hampton S)


Kershaw, Sir Anthony
Morrison, Hon C. (Devizes)


King, Rt Hon Tom
Morrison, Hon P. (Chester)


Knox, David
Murphy, Christopher


Lamont, Norman
Myles, David


Lang, Ian
Neale, Gerrard


Latham, Michael
Nelson, Anthony


Lawrence, Ivan
Neubert, Michael


Lawson, Rt Hon Nigel
Newton, Tony


Lee, John
Normanton, Tom


Le Marchant, Spencer
Nott, Rt Hon Sir John


Lennox-Boyd, Hon Mark
Onslow, Cranley


Lester, Jim (Beeston)
Oppenheim, Rt Hon Mrs S.


Lewis, Sir Kenneth (Rutland)
Page, Richard (SW Herts)


Lloyd, Ian (Havant &amp; W'loo)
Parkinson, Rt Hon Cecil


Lloyd, Peter (Fareham)
Parris, Matthew


Loveridge, John
Patten, John (Oxford)


Luce, Richard
Pattie, Geoffrey


Lyell, Nicholas
Pawsey, James


MacGregor, John
Percival, Sir Ian


MacKay, John (Argyll)
Peyton, Rt Hon John


Macmillan, Rt Hon M.
Pink, R. Bonner


McNair-Wilson, M. (N'bury)
Pollock, Alexander


McNair-Wilson, P. (New F'st)
Porter, Barry


McQuarrie, Albert
Prentice, Rt Hon Reg


Major, John
Price, Sir David (Eastleigh)


Marland, Paul
Prior, Rt Hon James


Marlow, Antony
Proctor, K. Harvey


Marten, Rt Hon Neil
Pym, Rt Hon Francis


Mates, Michael
Rathbone, Tim


Maude, Rt Hon Sir Angus
Rees, Peter (Dover and Deal)


Mawby, Ray
Rees-Davies, W. R.


Mawhinney, Dr Brian
Renton, Tim


Maxwell-Hyslop, Robin
Rhodes James, Robert


Mayhew, Patrick
Rhys Williams, Sir Brandon


Mellor, David
Ridley, Hon Nicholas





Rippon, Rt Hon Geoffrey
Temple-Morris, Peter


Roberts, M. (Cardiff NW)
Thatcher, Rt Hon Mrs M.


Roberts, Wyn (Conway)
Thomas, Rt Hon Peter


Rossi, Hugh
Thompson, Donald


Rost, Peter
Thorne, Neil (Ilford South)


Royle, Sir Anthony
Thornton, Malcolm


Rumbold, Mrs A. C. R.
Townend, John (Bridlington)


Sainsbury, Hon Timothy
Townsend, Cyril D, (B'heath)


St. John-Stevas, Rt Hon N.
Trippier, David


Scott, Nicholas
Trotter, Neville


Shaw, Giles (Pudsey)
van Straubenzee, Sir W.


Shaw, Sir Michael (Scarb')
Vaughan, Dr Gerard


Shelton, William (Streatham)
Viggers, Peter


Shepherd, Colin (Hereford)
Waddington, David


Shepherd, Richard
Waldegrave, Hon William


Shersby, Michael
Walker, Rt Hon P.(W'cester)


Silvester, Fred
Walker, B. (Perth)


Sims, Roger
Walker-Smith, Rt Hon Sir D.


Skeet, T. H. H.
Waller, Gary


Smith, Tim (Beaconsfield)
Walters, Dennis


Speed, Keith
Ward, John


Speller, Tony
Warren, Kenneth


Spence, John
Watson, John


Spicer, Jim (West Dorset)
Wells, Bowen


Spicer, Michael (S Worcs)
Wells, John (Maidstone)


Sproat, Iain
Wheeler, John


Squire, Robin
Whitelaw, Rt Hon William


Stanbrook, Ivor
Whitney, Raymond


Stanley, John
Wickenden, Keith


Steen, Anthony
Wiggin, Jerry


Stevens, Martin
Williams, D.(Montgomery)


Stewart, A.(E Renfrewshire)
Winterton, Nicholas


Stewart, Ian (Hitchin)
Wolfson, Mark


Stokes, John
Young, Sir George (Acton)


Stradling Thomas, J.



Tapsell, Peter
Tellers for the Noes:


Taylor, Teddy (S'end E)
Mr. Anthony Berry and


Tebbit, Rt Hon Norman
Mr. Carol Mather.

Question accordingly negatived.

Main Question put and agreed to.

Resolved,
That this House takes note of the Report of a Committee of Privy Counsellors on the Falkland Islands Review (Cmnd. 8787).

Orders of the Day — Rating and Valuation

The Under-Secretary of State for Scotland (Mr. Allan Stewart): I beg to move,
That the Valuation (Plant and Machinery) (Scotland) Order 1983, a copy of which was laid before this House on 17 January, be approved.
As hon. Members will be aware, the purpose of the order is to exclude from valuation certain external plant and machinery in Scotland. Its general effect is to bring about broad parity of treatment for external plant throughout Great Britain.
The House will wish to have a general account of the background to the proposals in the order and of the Government's reasons for giving a high priority to this change in the valuation system. I shall come to that in due course. It may be for the convenience of hon. Members if, in the first instance, I explain briefly the way in which the order achieves its objectives.
Articles 1 and 2 are formal and require no comment from me. The main substance of the order is contained in article 3, which makes two amendments to section 42 of the Lands Valuation (Scotland) Act 1854. Section 42 describes the lands and heritages that are subject to valuation for rating. The first amendment substitutes the words.
so far as it relates to lands and heritages
for "any building". Essentially, that is consequential on what follows, and allows the proviso to deal with plant outside a building.
The second amendment removes the existing passage relating to machinery and similar items, one effect of which was to bring within valuation the items that we wish to exclude. It substitutes a new passage that affects those exclusions without disturbing the beneficial effect of the old passage.
If any hon. Members have any detailed questions about the manner in which the new passage achieves those objectives, I shall be happy to respond at the end of the debate. Initially, it may suffice if I summarise the effects of the order.
Electric motors will continue to be excluded from valuation. Plant
for producing or transmitting first motive power
will remain in valuation, thus maintaining the position obtained by the Lands Valuation Amendment (Scotland) Act 1982, which the House approved on 13 December.
Plant for
heating, cooling, ventilation, lighting or draining of, or the supplying of water to, the lands and heritages, or the protection of the lands and heritages from fire
will remain in valuation, except for external plant that is
used in an industrial or trade process".
Other removable plant within a building continues to be excluded from valuation. The major change is that other external plant will remain in valuation only if it has an external capacity of more than 200 cu/m or is so fixed that it cannot be removed "without substantial damage".
Also excluded is associated pipework—I notice that the hon. Member for Dunbartonshire, East (Mr. Hogg) is following this closely, because he raised the subject during our debates on the Local Government and Planning (Scotland) Act—
within the curtilage of premises … used for an industrial or trade process".
That leaves cross-country pipelines in valuation.
The effect of the provisions of articles 4 and 5 is to ensure that assessors shall take account of the substantive provisions of the order with effect from their operative date—1 April 1983. They enable the necessary alterations to be made to the valuation role and, in effect, provide for the issue of valuation notices, appeal rights and similar matters.

Mr. Dick Douglas: There is some dispute about the wording in the order on the vexed matter of pipelines. Will the Minister assure us that he is not relying on the courts to solve the problem eventually and that the wording agrees with the interpretation that he has given?

Mr. Stewart: Ultimately, all matters of law are subject to interpretation by the courts. I assure the hon. Gentleman that the only pipes that are to be excluded from the valuation are those within the curtilage of premises used for an industrial or trade process. For example, pipelines leading into petrochemical plant would be rateable until they entered the immediate vicinity of the plant—generally, by crossing the boundary fence.
I shall deal with the background to the order and the Government's objectives in introducing it. I shall take the opportunity of commenting briefly on a number of criticisms made by the Convention of Scottish Local Authorities, some of which have been referred to by Opposition Members in recent debates, notably on the rate support grant order.
The Government's main purpose is to remove a serious anomaly which has imposed a severe disadvantage upon industry in Scotland, and which, if continued, would constitute a serious impediment to industrial development.

Mr. J. Grimond: Can the oil companies set off against taxation the rates which they pay upon outside installations?

Mr. Stewart: Yes, that is correct. The effect of rating on corporation tax payments is unchanged by the order.
The removal of this impediment will be welcomed by many hon. Members, a number of whom in the past have referred to specific examples that interested them. My hon. Friend the Member for Perth and East Perthshire (Mr. Walker) and the right hon. Member of Orkney and Shetland (Mr. Grimond) have mentioned oil companies, but the point does not only cover oil companies. The hon. Member for Dunbartonshire, East mentioned a company in his constituency which had made representations to him, and I believe that he will confirm that that was not an oil company. We are talking about 1980–81. He said that the company was paying £132,000 in rates in Scotland, whereas it paid £40,000 only for a similar plant in Wales. That is an example of the scale of the problem.
It has generally been common ground between hon. Members on both sides of the House that high priority should be given to promoting industrial development in Scotland. We must take all reasonable measures to ease the severe problems of unemployment which are of anxiety to all hon. Members, and to promote the increased level of industrial activity on which continued economic recovery largely depends.
The disadvantage of which I have spoken stems from the restrictive wording of the Lands Valuation (Scotland) Act 1954. When those provisions were first framed, and for many years thereafter, the problem did not arise


because there was little external plant and machinery. In recent years, mainly, although not solely, with the development of the oil and petro-chemical industries, external plant has become a prominent feature of the industrial scene. Such plant falls to be valued for rating in Scotland under the out-of-date provisions of the 1854 Act, as amended in 1902, although it is generally not liable to valuation in England and Wales. That is the point of the order. Consequently, on 1982–83 figures, industry in Scotland has borne a rates burden of about £31 million more than it would have had to bear if the relevant statutory provisions had been in line with those south of the border. The figure of £31 million is a severe additional burden.
I am sure that if we had not taken action to rectify the anomaly, the liability to rates on external plant would have been sufficient to tilt the balance against the development of new enterprises or, in some cases, the expansion of an existing enterprise. Indeed, at a time of economic recession when, regrettably, companies can be forced to rationalise capacity, that position could well count against Scottish plant when the merits of retaining one plant as against another are being considered by companies.

Dr. J. Dickson Mabon: I sympathise with the general proposition, but one or two propositions must have been made by companies to determine the Government to introduce the order, with which I sympathise. I would like the Minister to tell us what large establishments would have been prejudiced without the order.

Mr. Stewart: The right hon. Gentleman has been in government. He knows perfectly well that I will not rise to that bait.
The case in favour of removing the anomaly is overwhelming. I hope that the Opposition agree at least with that part of the Government's case. If not, they should recognise that they are arguing against a measure that is intended to maintain industrial activity and jobs. That would sit uneasily with their claims to be concerned about these matters. If, on the other hand, they agree with the principle of the order—the hon. Member for Glasgow, Garscadden (Mr. Dewar) was quoted in this morning's newspapers as agreeing with the principle—we can confine our debate to the ways and means of giving effect to it and the question whether it would have been right to tackle further anomalies at the same time.
As regards further anomalies, it has been put to my right hon. Friend and myself that at the same time the Government should have brought the valuation of internal plant and machinery into line with the practice in England and Wales. That might have partly offset the overall effect on industry as a whole of derating external plant and machinery. The proposition does not have the support of the Convention of Scottish Local Authorities.
At the level of the individual enterprise many would experience a sharp increase in the rate burden without compensating reductions. Mainly for that reason, the Government decided that it would not be appropriate to provide for re-rating internal plant at present. But the anomaly that has arisen on external plant and machinery is so severe and potentially damaging in its effects that it merits separate and decisive treatment, as proposed by the order.
I would not accept either that it would have been appropriate to complicate matters by seeking to deal with a variety of other anomalies in the valuation system on which representations have been and are being received by a number of hon. Members—[HON. MEMBERS: "Caravans."]—in relation to caravans and to a number of other subjects. I hope hon. Members will not drown me out by voicing the number of anomalies that they are considering.
These wider proposals are of a different kind. My right hon. Friend is considering a number of possibilities of resolving particular anomalies and we shall advise the House when we have firm proposals to make. But in the meantime we consider it essential to press ahead with the narrow but important proposals embodied in the order.

Mr. Barry Henderson: When considering these wider matters, will my hon. Friend ensure that we consider whether a mechanism might be devised by which the decisions of assessors may have some further court of appeal in a way which would save having to keep legislating precisely to tell them what to do in these various circumstances?

Mr. Stewart: I note what my hon. Friend has said. I can assure him that it would be the Government's intention, in considering action on these anomalies, to introduce a comprehensive package so that the House would be able to consider the total effect on all ratepayers.
Hon. Members will wish to have an assessment of the effects of the proposals in the order on the level of rates. I advise the House that it is desirable to keep the changes in perspective. Over the whole of Scotland, the proposals would result in a reduction of 2·4 per cent. in rateable value. On the other hand, in recent years rateable value has increased by about 1·7 per cent. annually. What is proposed can therefore be regarded as a check on the expansion of the rate base rather than a reduction.

Mr. Dennis Canavan: What about Central region?

Mr. Stewart: I am coming to Central region.
Without compensating savings elsewhere in their budgets, present estimates suggests an increase of 0·75p in the average rate of about 122p for authorities other than Orkney, Shetland, Central and Falkirk. [Interruption.] I have given the total cash figure.
I shall deal briefly with the four authorities—Orkney, Shetland, Central and Falkirk. For Orkney, the information available at the time of the rate support grant Settlement showed a reduction of £6·5 million, or about 42 per cent. of total rateable value. That would have had a pronounced effect on rates. We therefore concluded that, although average domestic rates bills in Orkney are significantly below the Scottish average, an increase in the rate support grant payable to Orkney of £1 million was warranted. That of course will be reviewed in the light of further information about the authority's rating resources in 1983–84.
For Shetland, the need for compensation is uncertain because of the effects on local rating resources of unpredictable changes in the valuation for rating of Sullom Voe. Hon. Members may have seen some press comment about the scale of the prospective changes. We are therefore prepared to listen carefully to any representations the council may make. The level of grant for future years will be reviewed during 1983.
In reaching a decision not to divert additional grant to Central region, we had to pay particular heed to the level of rating resources for Central and Falkirk. The rating resources for both authorities are, and have been for some years, significantly above the level of the local rating resources per head, as augmented by the resources element of rate support grant of authorities generally. Those two authorities have had and still have rating resources per head significantly above the average. In the current year, the advantage is about 4 per cent. for the regional council and 15 per cent. for the district council.
We estimate that the effect of the order will be to bring rating resources per head for those councils to about the same level as those for authorities generally. We therefore concluded that it would not have been justified to transfer grant from other authorities, many of which have average domestic rate bills above, and local rating resources below, the levels in Central region.
An important point on which several Opposition Members have already expressed concern is whether a separate sum should have been provided within the rate support settlement to offset wholly or partly the reduction in total rate income resulting from derating external plant and machinery.
I am aware of the views that have been expressed by Labour Members and by COSLA. We considered the matter carefully before the terms of the RSG settlement were announced. My right hon. Friend's primary concern in making an RSG settlement is to ensure that, having regard to all relevant circumstances, its terms are equitable and appropriate. A broad judgment is made on the overall level of expenditure which it would be appropriate for authorities to incur. That is followed by a judgment of the amount of grant to be provided by the Government and its distribution to authorities having regard to local circumstances. That is how the grant settlement for 1983–84 was determined.
My right hon. Friend and I remain firmly of the view that that was an equitable settlement. The grant quantum was £1,924·25 million. It was significant that the right hon. Member for Glasgow, Craigton (Mr. Millan), speaking from the Opposition Front Bench, said that rate increases for the following year were likely to be modest. On that basis, I see no justification for the claim that the settlement as a whole was inadequate or that the grant totals insufficiently took into account the change in the rate base for which the order provides.
The remaining question is whether the total grant has been distributed equitably. During consultations before the settlement my right hon. Friend asked whether the convention wished to suggest any change in the distribution of grant to individual authorities to take account of the effect of derating external plant and machinery. The convention chose to offer no advice and one can understand why. As I have said while commenting on the position of authorities in Central region, diversion of grant would have meant a reduced level of support for authorities with higher domestic rate bills and lower rating resources than most of those affected by the order.
My right hon. Friend would have been willing to consider any proposals by the convention on grant distribution but as none was forthcoming he had no alternative but to exercise his own judgment, which was to provide some compensation only to Orkney, a small authority liable to suffer particularly severe effects.
I believe that the object of the order—to ease a severe anomaly which is liable to impede industrial development in Scotland and to make Scotland a more attractive location for a range of key industries—should command wide support in the House.

Mr. Harry Ewing: I have never regarded the Under-Secretary of State for Scotland as anything like convincing and the House has seen him at his least convincing tonight. I know that in his heart of hearts the hon. Gentleman does not agree with the order. When he says that a number of my right hon. and hon. Friends have argued that the Government should have borne the cost of the operation, he forgot to tell us that when he was a Back Bencher in February 1981 he, too, argued that the Government should bear the cost. Moving a new clause as a member of the First Scottish Standing Committee that was considering the Local Government (Miscellaneous Provisions) (Scotland) Bill, the hon. Gentleman said:
If it is accepted that there is an anomaly, the cost must be borne by other ratepayers or by central Government. Precedents suggest that financing changes in the rating system are met by central Government."—[Official Report, First Scottish Standing Committee; 24 February 1981, c. 681.]
The hon. Gentleman quoted the 1929 precedents, in which there was a substantial exemption of agricultural and industrial subjects for rating. Also, in 1956, there was a full exemption of agriculture in Scotland and in 1974, plant and machinery of the type that we are discussing was exempted in England and Wales and the complete cost was met by Parliament. No more than two years ago, the Minister argued that if that measure was to be introduced it should be financed wholly by central Government. Ministerial office has changed the hon. Gentleman. It is an unseemly and unenjoyable sight to see him standing on his head.
I shall now deal with the principle of the order. When the subject was first discussed in February and March of 1981 and subsequently, the Opposition made it clear that we favoured the principle. We do not favour the practice that the Minister is adopting in introducing that principle.
When the subject was discussed in February 1981, it was the only so-called anomaly that was apparent in the rating system. Since then, caravans have been included. Is the Minister saying that the caravan issue that has been introduced is not an anomaly? My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) and I were given to understand today that not only is the hon. Member for Perth and East Perthshire (Mr. Walker) introducing a caravan rating Bill but that the Scottish Office is drafting it and giving him assistance and will ensure that it goes on the statute book.

Mr. Bill Walker: rose—

Mr. Ewing: I shall not give way to the hon. Member. If the Minister wants to deny that, I shall give way to him. Does he want to deny what the hon. Member for Perth and East Perthshire told me and my hon. Friend the Member for Garscadden?

Mr. Allan Stewart: I assure the hon. Gentleman that the private Member's Bill that I understand my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) intends to introduce is his private Bill and it will be drafted by him.

Mr. Ewing: I am glad that the Minister has cleared up one point because the hon. Member for Perth and East Perthshire gave my hon. Friend and me to understand—

Mr. Bill Walker: rose—

Mr. Ewing: I shall give way to the hon. Gentleman in a moment. I should like the Minister to clear up the other point. Is the Minister saying that the Government will not support the hon. Member for Perth and East Perthshire and that his Bill will not therefore reach the statute book?

Mr. Allan Stewart: I suggest that the hon. Gentleman uses the—

Mr. Barry Henderson: On a point of order, Mr. Deputy Speaker. The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) keeps raising questions that he must ask hon. Members on this side of the House to provide information about, but he will not give way to them. Is that not an abuse of the procedures of the House?

Mr. Deputy Speaker (Mr. Paul Dean): I understand how the hon. Member for Fife, East (Mr. Henderson) feels, but it is entirely up to the hon. Member who has the floor whether he gives way.

Mr. Ewing: I see our apprentice Chairman trying to become Chairman and I doubt whether he will ever achieve it. I shall now give way to the hon. Member for Perth and East Perthshire so that he can say whether he told my hon. Friend the Member for Garscadden and me that the Scottish Office is drafting the Bill and will assist it on to the statute book.

Mr. Bill Walker: I thank the hon. Gentleman for giving way. I trust that he will realise that, to put it mildly, he was harassing me on the stairs. He was attempting to put words into my mouth when I replied to questions that he asked me. I said that I would give the hon. Member for Glasgow, Garscadden (Mr. Dewar) the details of my Bill in the same way as I have given them to my Friend the Minister and that I would welcome advice.

Mr. Ewing: The hon. Gentleman is entitled to allow his imagination and memory to play tricks on him. We shall leave the caravan Bill where it is, on the basis that the Minister has given an undertaking that the Scottish Office is not drafting it and will not assist it on to the statute book.
The Minister argued that the derating of external plant and machinery will assist industrial investment in Scotland. He took no account of the damaging effect that the increase in rates will have on existing industry in Scotland, especially in Central region. When the Minister gave his figures, it was noticeable that he did not quote the assessment in the Scottish Office document of 16 April that the effect of the measure that he is pushing through tonight will be a 10·5p in the pound increase in the Falkirk district.
The Minister must surely know that industry in the Falkirk area has been devastated in recent months by the Carron company and a host of others going out of business and by job losses in the petrochemical industry. If the Minister thinks that the reduction in rates for the petrochemical industry will stop British Petroleum from paying off workers, he has another think coming. It is already planning to unload another 200 people in the knowledge that the order will reach the statute book. How

on earth the Minister can argue that the order will stimulate industrial investment in Scotland is beyond my comprehension, and also that of the industrial companies thinking of expanding their enterprises in Scotland.
The order will be especially damaging to industry in Central region in general and Falkirk district in particular. The Minister must know also that it will prove damaging to commerce as shopkeepers will have to pay enormous increases in their rates bills. Even domestic ratepayers will face enormous increases.
The Minister had the impertinence to come to the House and tell us that he is not compensating Central region and Falkirk district because they are good housekeepers—they have done exactly what he wanted them to do and kept their rates at a reasonable level. He does not see the need to compensate them for the £8 million that they will lose because of the order. He said that he is not compensating them also because of their rate income. It is important to note that Central region does not receive any higher percentage rate support grant than any other region. Neither Central region nor Falkirk district qualifies for the resources element. The rates available to them are the income they receive from rateable subjects.
The Minister said that he is using the measure to reduce the income from the rateable subjects to bring Central region and Falkirk district broadly in line with the remainder of Scotland. That is an outrageous suggestion.
The Minister knows perfectly well that Central region has suffered a great deal of pollution and inconvenience—a whole host of things—because of the industry there. That happens in any region, not just Central region. One does not get industrial rate income for nothing. One gets it because there is industry in the region. It is as simple as that. Industry brings with it advantages as well as disadvantages. The idea of the rates is that the rate income can be used to level off the disadvantages. Any advantage that Central region or Falkirk district had has been removed by the Minister in introducing the order.
The Minister cannot defend what he is doing. Two groups are gaining from the introduction of the order. One is the petrochemical companies in Grangemouth in my constituency and in other areas in Scotland. The Minister was not generous to the Shetlands when he recently included £1 million for them in the rate support grant settlement. That £1 million came from other authorities, not the Government. It was a reallocation of the resources element in the rate support grant settlement.
The Minister is the Freddie Laker of the Scottish Office. He is doing favours for British Petroleum, Imperial Chemical Industries, BXL and other companies, using domestic ratepayers' money—housekeepers' money and shopkeepers' money—and other industries' money. The Scottish Office is not providing a penny piece to put into practice what the Minister regards as one of his favourite principles, coming as he did from the Confederation of British Industry before he came to the House.
The way in which the local authorities have been treated is an absolute disgrace. The Minister talked about consultation. The records of the meetings with the Convention of Scottish Local Authorities show that COSLA asked for industrial rate comparisons. When the comparisons were given, they were completely ignored. The Minister did not even regard those comparisons as relevant to the discussion. The Minister will say that they were not ignored. He will have to explain how he comes


up with the formula in the order. If he had not ignored the comparisons, he would have come up with a different order.

Mr. Allan Stewart: If, as the hon. Gentleman suggests, COSLA was so dissatisfied, why did it not make a recommendation?

Mr. Ewing: The Minister is using COSLA to shirk his responsibilities. The Minister told COSLA that the Government were not prepared to put a penny piece into this exercise to back up their principles. He turned to COSLA with that pure white image that he is supposed to project to the country, and said, "You make a recommendation and tell us where to take the money from and from which other local authorities to take the money." The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) has departed the scene after his intervention. He should understand that his district council will have to contribute to the loss of rate revenue in some parts of Scotland. His district council will lose money from the resources element as a result of this exercise.
Therefore, the Minister had no right to say that to COSLA. It was improper to do so. He should have had the courage of his convictions and told it, "We are not prepared to put any money in. We will go ahead and introduce the order."
The other people who will gain from the order are the Government. They have hidden that fact.

Mr. Stewart: indicated dissent—

Mr. Ewing: The Minister shakes his head with the innocent hurt look that he puts on from time to time. He knows that the profits of the companies that he is helping will be increased, and that as a result the corporation tax from the companies will be that much higher. Not only are the ratepayers of my constituency and my hon. Friends' constituencies paying to implement the Government's policy, and to back up the Minister's principles—no wonder that I described the Minister as the Freddie Laker of the Scottish Office—but by a back door method the Government are taking some of the ratepayers' money from them in the form of taxation on the increased profits that those companies are bound to show.
My hon. Friend the Member for Dunfermline (Mr. Douglas) is here, as is the hon. Member for Fife, East (Mr. Henderson), which is a good thing, because Fife stands to lose a substantial future rate income from the order. At the moment it stands to lose about £500,000, but in the future, because the plant at Moss Morran—which will have appeared on the valuation roll at about £13 million until now—will, under these proposals, appear at £8 million, there will be a loss of £5 million of rateable value.
The hon. Member for Fife, East should think about the investment that Fife regional council, Kirkcaldy district council and Dunfermline district council have put into the site at Moss Morran and the Braefoot Bay complex. Ratepayers are just as entitled to a return on their investment as big businesses, but Tory Members always forget this. The ratepayers in Fife will not get any return on their investment. They will lose from this.

The Under-Secretary of State for Scotland (Mr. John MacKay): Jobs.

Mr. Ewing: The hon. Member should know better than to say that. I have proven beyond any shadow of doubt that the petrochemical industry is better at shedding jobs than

creating them. In the past two years at Grangemouth, we have lost about 10,000. Even at the moment, the petrochemical industry there is shedding jobs. If 200 jobs are created at Moss Morran, that will take up jobs lost at Grangemouth. There will be no additional jobs in Scotland.
This order will cost Scotland jobs. I have already told the Minister, and I shall tell him again, that when, as we expect in the not-too-distant future, there are closures in Central region, we shall put the blame where it belongs—on the shoulders of the CBI, the central Scotland chamber of commerce, and the Minister. They will all have their share of the responsibility for the families whose future has been wrecked by the action that the Minister is taking tonight. We shall vote against the order.

Mr. Barry Henderson: The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) has given part of the reasons why some of the arguments that might have been put forward by Falkirk district council have not had the hearing that they should have had—if the hon. Member's speech this evening is anything to go by as to the attitude with which he has sought to win friends for any argument.
The anomalies of the district valuation system, one of which we are discussing, and it is the most important one for jobs in Scotland, have existed for a long time. They existed when the hon. Member for Stirling, Falkirk and Grangemouth was in government. What did he do about any of them then? Nothing. He has the nerve to come along and put on my hon. Friend the Minister the blame for a great many things.
However, as my hon. Friend said, and no one has denied it, there has been broad agreement throughout Scotland, in Parliament and in local government that the anomalies that the order seeks to cure have been needing to be dealt with for some time. That is a helpful starting point.

Mr. Norman Hogg: Will the hon. Gentleman tell the House who, and which organisations, have made the representations that he claims are the view of local authorities and others?

Mr. Henderson: I heard COSLA say that it wanted to see the anomaly cleared up, as did the hon. Member for Glasgow, Garscadden (Mr. Dewar) in Committee. These seem to be reasonable voices to have listened to as having been representative of a broad group of feelings.

Mr. Harry Ewing: At which time did COSLA say to the Scottish Office that it wanted to see that anomaly cleared up in the way that the Minister is clearing it up? COSLA is clearly on record as being strongly opposed to this measure. COSLA met the Scottish Conservatives this afternoon to tell them that.

Mr. Henderson: The hon. Gentleman makes no point at all. He simply tries to make further enemies. I have stated clearly that COSLA wanted the anomaly cleared up. Does the hon. Gentleman deny that COSLA wanted the anomaly cleared up?

Mr. George Foulkes: Get on with it.

Mr. Henderson: I am willing to give way to the hon. Member for Stirling, Falkirk and Grangemouth if he is prepared to say that COSLA does not want the anomaly cleared up.

Mr. William Hamilton: The hon. Gentleman should have read the letter from COSLA dated 21 January which states that it had
no objection to external plant and machinery"—
and other anomalies—
being derated if local authorities were compensated for the loss of rate income.
That is the point.

Mr. Henderson: I am grateful to the hon. Gentleman. He supports my point entirely. COSLA wanted to see the anomaly cleared up.

Mr. Hamilton: On condition.

Mr. Henderson: COSLA says that it would like to see it cleared up by a particular method. It is not the method in every respect, that my hon. Friend has brought before the House. That is the issue on which sensible discussion should take place. We have wasted a fair amount of time getting to that point. There is still agreement in the House, I hope, that there was a need to clear up the anomaly. The only argument—it did not require all the heat brought into the debate by the hon. Member for Stirling, Falkirk and Grangemouth—is how best this long-standing anomaly, which the Labour Government did nothing about, can be cleared up most effectively and fairly for the people of Scotland.

Mr. Foulkes: The hon. Gentleman is a long-standing anomaly. Sit down.

Mr. Henderson: The implications for Fife, have been mentioned. I venture to suggest that if the statutory power to bring forward the order had not been introduced by the Government, we might not have the Moss Morran complex, Braefoot Bay and the rest, with the substantial implications for jobs and rating valuation.
I can understand COSLA saying that it would prefer taxpayers as a whole to find the replacement for money that local authorities have been accustomed to receive as a result of an anomaly in the rating and valuation system. That is understandable. COSLA represents local authorities that have been accustomed to certain goodies coming their way, which will not come quite in that manner in the future. It is, however, for the House to make a judgment on the best way to meet the needs of the people as a whole.
In correspondence with the Minister some time ago on the method for changing the burden, I understood my hon. Friend to say that the average rate in Scotland was £1·20 and that outside the four authorities most directly affected the effect on the average domestic ratepayer will be 0·75p. Whatever the arguments, which might have been more sensibly presented had the case not been made by the hon. Member for Stirling, Falkirk and Grangemouth, that kind of figure does not suggest a need for the kind of heat and lack of light displayed from the Opposition Front Bench.
The resources element in the rate support grant achieves a considerable spreading of the load throughout Scotland as a whole. I do not wish to detain the House. It is possible that other hon. Members will produce more rational arguments—[HON. MEMBERS: Hear, hear]—than those heard from the Opposition Front Bench. I am grateful to the Minister for completing the clarification. This was an anomaly that would have endangered jobs in Scotland. I am more grateful still for his assurances that the Government are facing up to other problems in the

valuation system. I hope that when they come to preliminary conclusions they will publish a consultative document to enable hon. Members and others with a direct interest to examine the issues in a calm and sensible manner and reach conclusions that benefit the people of Scotland as a whole.

Mr. J. Grimond: I have already spoken twice on this proposal. There is no rule against making the same speech three times in the Houses of Parliament—and when I say "three times" I mean three times. However, I shall refrain from repeating the whole of my speech.
I am bound to repeat that this is a most damaging and pointless order. Apparently, it was introduced at the behest of the CBI, but even the CBI now has cold feet about it. The whole Government case is shot from under them by what was said by one of their own members—the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), who was then a Minister at the Scottish Office. This is what he said in the Scottish Standing Committee on 11 February 1982:
The sums involved arise because of the high degree of external plant in those areas"—
those areas being Orkney and Shetland.
If they are excluded from any such change, there will be little point in making that change".—[Official Report, First Scottish Standing Committee, 11 February 1982; c. 413.]
He was saying distinctly that this order is aimed at Orkney and Shetland, and that were it not for Orkney and Shetland, there would be no point in making it—even for this Government, who have introduced some pretty footling orders in their time. That is out of their own mouths.
The effect on Orkney and Shetland will be extremely damaging to the ordinary ratepayer. It will be very damaging to ordinary industry, which will be of importance when the oil is over. However, it will not do the oil companies any good at all, because, as the Minister just said, they set off rates against other taxation. Therefore, the effect on Orkney and Shetland will be great damage to local industry and local people and no good to anyone—except possibly the Exchequer.
The other point about the Government's case is that they argue that this order brings the law of rating in Scotland into line with that in England. Of course it does not do that. The law of industrial rating in England is still totally different from that in Scotland, and if the Government do not know that it is time that they did. The local authorities may have been extravagant, they may have too many staff, and perhaps they should take note of Government policies, but it cannot make sense suddenly to alter the whole rateable base, particularly of two rather small rateable areas such as Orkney and Shetland.
We are of course grateful to the Government for the offer of £1 million or so to Orkney, but that is only about half of what it will cost Orkney, and so far we do not know what is to be given to Shetland.
This order is to be brought in by the Government as a result of no pressure that I have been able to discover. We are told that there are widespread demands for it. In my opinion, that is nonsense. I have found no widespread demand that a deliberate blow should be aimed at Orkney and Shetland. I have met no one who supports that.
Who is to pay? It will be not the Government, but the rest of the local authorities in Scotland, for some obscure reason. Why the Exchequer, which will benefit, should not pay, I do not understand.
In the last debate the Minister said, as a great concession, that Orkney and Shetland had been allowed to exceed their guidelines. The point is not exceeding the guidelines. The point is that we wish to persuade ordinary people to live in Orkney and Shetland without being rated out of existence. We want to help industry, and to do that we must be allowed to rate the main payers of rates in the area.

Mr. Allan Stewart: I want to correct the right hon. Gentleman on that point. I certainly did not say that Orkney and Shetland were being encouraged to exceed their guidelines. I pointed out that the guidelines for 1983–84 were being increased over those for 1982–83. That is a different proposition.

Mr. Grimond: At any rate they are being encouraged to spend more money. We want to know where the money is to come from. I hope that the Government will rapidly make up their mind what they will do to assist Shetland out of the muddle into which it has been put by the Government, and by no one else.
Finally, what is the significance of 200 cu m? Why was that figure chosen? No doubt the Government have given careful consideration to this matter and it is of great significance, but I think that we should be told about it.
If I were the Government, I should withdraw this order, and, if they cannot do that, at least they should make the burden fall on the Exchequer, not other local authorities, and see that Orkney and Shetland are adequately compensated.

Mr. Norman Hogg: The order, or rather the intention behind it, has been around for some time. Indeed, the Minister has made some play of points that I made in the Scottish Standing Committee when we previously debated it. I shall bring his figures up to date in a moment.
Companies with external plant have been lobbying, mainly through the CBI, but it is not without significance that the Cumbernauld Business Association in my constituency does not agree with the CBI and has made strong representations to me. As has been said, the principle behind the order was certainly supported by Labour Members when the Local Government and Planning (Scotland) Act 1982 was debated. What has happened since then brings into doubt the principle on which we were founding our point of view. Indeed, when the practicalities are examined the problems begin to appear and they are worrying.
The Minister has said that in my constituency there is a large plant belonging to an international company engaged in the liquification of gas. It has invested a great deal of money in Cumbernauld. It employs many local people and that puts wages into the local economy. It pays £170,000 in rates to the two local authorities, which makes it important to the local community and the local council. I can understand its case and I can support it in principle, but when it comes down to how the Government have decided to handle this, I am afraid that I must come out against the order, along with my hon. Friends.

[Interruption.] I did not hear what the hon. Member for Banff (Mr. Myles) said, but if he was disagreeing with me and has something to say I am sure that he will intervene. We can normally hear him clearly.
Labour Members want to be certain that the order is in the interests of industry and local government as a whole. That is not what is happening. If the Government were to do something about the energy costs of the company to which I have referred, and similar companies, it would be more to the point. That is something I can pursue on another occasion. If the Government get their way and the company to which I am referring is derated, the shortfall will have to be found by other people, local authorities and traders in my constituency. It may be because of the resources element that the blow to local authorities will be less than that, say, of Central region. I dare say that we shall hear further about that from those hon. Members who represent that region. The implications for my local authorities are such that I could not in any way support the order.
When the Minister replies I hope that he will say something about the effect of implementing the order and its effect on Strathclyde region and Cumbernauld and Kilsyth district council. What would be the overall loss of revenue to local government in Scotland? The Minister fielded many percentages but never referred to hard cash and, being an Aberdonian, hard cash has a great deal of attraction for me. I hope that he will say specifically what this entails. As I understand it, COSLA has suggested that we are talking about £31·1 million, and its figures are usually right. We know from long experience in dealing with rate support grant orders that COSLA gets its sums right and that the Minister gets his wrong. Can we clarify exactly how much money we are talking about? What would it mean in rating levels for Central region, Strathclyde region and the district councils? We know what COSLA says, but we must have the hard facts from the Government.
Can the Minister tell us—I am sure that he has been advised by his civil servants—whether there will be a problem with companies quickly converting covered plant to external plant if the order were to go through? Will they take the roofs off some buildings to make them external plant and, therefore, have them derated. I hope that the Minister can clarify the point when he replies.
What discussions has the Minister had with the regional assessors? Does he believe that an attempt will he made by the assessors to make up the shortfall by altering the bases on which they rate plant and the buildings attached thereto? My local authorities are asking those questions. The Cumbernauld Business Association called a special meeting of its members last month because it was seriously worried about what the proposals would mean. I hope that the questions can be answered and that we can have some demonstration of what the proposals mean for domestic ratepayers, shopkeepers, other businesses and factories in the communities that I represent.
I have already heard what the Minister proposes for financing the consequences of the order. Although the Labour party spoke up for the order in principle when we debated amendments to the Local Government and Planning (Scotland) Act 1982, having heard what the Minister has proposed tonight I cannot join him in the Government Lobby. I shall vote with my right hon. and hon. Friends.

Mr. Albert McQuarrie: This statutory instrument seeks to remove the anomaly between the law of Scotland and that of England and Wales, to which there would have been no exception if local authorities were to be fully compensated for the loss of rate income. Unfortunately, the Government have apparently not decided whether the affected local authorities are to be compensated, and it is not made clear in this instrument what action will be taken to compensate those authorities. That must be determined by the Government rather than by the ratepayers.
As hon. Members have said. any steps taken by the Government will affect the ratepayers in those areas and in all Scottish local authorities if the Secretary of State decides to reimburse the affected authorities by means of an increase in the rate support grant resources element. That will naturally reduce the overall sum that will be available to other local authorities, and can lead only to a general increase in rates in many areas that do not receive an additional rate support grant. [Interruption.] There is very little time left in this debate, and I wish to say my piece. I am prepared to give other hon. Members the opportunity to do that, so perhaps they will be fair and let me have my say.
It is strange that it was the Government's intention to bring the legislation on external machinery into line with that of England and Wales and thus remove the anomalies. However, that is not being done, as internal plant in Scotland is at present derated, although that is not the case in England and Wales. I hasten to add, however, that I do not press the case for internal plant in Scotland to be derated, because Scottish industry has enough financial problems without adding another.
The proposd legislation will affect several authorities in Scotland—as the right hon. Member for Orkney and Shetland (Mr. Grimond) and the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) said—if it is estimated that the total reduction in rateable value throughout Scotland—as the hon. Member for Dunbartonshire, East (Mr. Hogg) said—would be about £31 million, of which £24·5 million can be accounted for in the three areas that I have mentioned.
This is a serious matter for local authorities. Several hon. Members from the affected constituencies have already caught your eye, Mr. Deputy Speaker, and no doubt others will hope to do so. I want to concentrate my remarks on the effect this proposal will have on the east Aberdeenshire section of the Banff and Buchan district council where the proposals in the statutory instrument have an on-cost effect on the ratepayers. It must be remembered that even a small loss in rateable value can have a serious effect upon small local authorities and the regions in which they are located.
In my constituency is the vast oil and gas complex located at St. Fergus. It is estimated that if this statutory instrument receives the approval of the House the rateable value of Banff and Buchan district will be reduced by £1,043,000, because of the amount of plant, machinery and pipes which are in the open. If we are to work on the 1982–83 rate poundage for that authority the loss of rateable value will result in a loss to the district council of £114,730.
In addition, Grampian region, which takes in sections of the constituencies of my hon. Friend the Member for

Banff (Mr. Myles) and of my hon. Friend the Member for Moray and Nairn (Mr. Pollock), will suffer to the degree that, based on the 1982–83 rate poundage, the actual loss in rate income would be £570,000. It can be seen, therefore, that the ratepayers in these areas will stand to have increases on their rates from which they will have no right to derive any benefit.
Is it the Government's intention wholly to offset these losses by giving additional sums to the affected authorities from the rate support grant resources element? If not, what steps do they propose to take to remove the burden from the ratepayers in Banff and Grampian region, and particularly in east Aberdeenshire, where the people are suffering enough because of the high rates of unemployment and the seemingly never-ending notifications of redundancies in many industries, and where they have no hope of alternative employment?
I appeal to my hon. Friend to consider reimbursing wholly the losses either by direct Government aid or from the rate support grant resources element. It is well known to my hon. Friend that many Scottish local authorities are having considerable difficulty in meeting the 1983–84 guidelines set by the Secretary of State for Scotland and in arriving at the rate poundage most authorities are having to give consideration to cutting essential services.
The impact of this statutory instrument on the authorities which come within the area I represent is such that there is an obligation on the Government to compensate them in full for the loss in rateable value. I trust that when my hon. Friend winds up the debate he will be able to advise the House how he intends to mitigate the additional strain on the resources of the local authorities which will be affected.
I must take issue with the right hon. Member for Orkney and Shetland, who condemned the Confederation of British Industry as being one of the bodies responsible for this order. In a letter of 9 November 1982, of which the right hon. Gentleman no doubt has a copy, the CBI says:
Any modification would involve a potential change in the rateable valuation of an authority in which such equipment is located. Since we initially approached the previous administration we have made clear out belief to the government, to MPs and to the authorities principally affected that the costs resulting from the change should not fall upon neighbouring ratepayers. And, because the anomaly results from legislation, our representations proposed that the cost should be met by Parliament. This is still our view and we believe that it is important to maintain this objective while being prepared to discuss the various alternatives outlined in the Scottish Office paper LGFS (M) (82) 8 attached to your letter. Indeed we have quoted a number of close precedents where such action was taken by Parliament.
That is a powerful argument for some action to be taken in respect of this statutory instrument. If my hon. Friend can say that the affected local authorities will be reimbursed in some form so that our ratepayers will not be so seriously and adversely affected, as pointed out by the hon. Member for Stirling, Falkirk and Grangemouth, that will give some satisfaction to the House. I hope my hon. Friend will be able to give that assurance.

Mr. Dennis Canavan: This order is yet another example of the absolute hypocrisy and duplicity of the Government. Their declared policy on rates is quite simple—keep them down—yet the effect of the order will increase the rate bill for many ratepayers in


many areas of Scotland. The Government are refusing to give any compensation to the local authorities as a result of this change, with the exception of Orkney and Shetland, where I understand the compensation offered is hopelessly inadequate to deal with the situation there.
In the Central region of Scotland, part of which I represent, the rate increase will amount to about 5p in the pound for the regional rate and 4p in the pound for the district rate in the Falkirk district. Thus, the Falkirk ratepayer will face an increased rate bill of 9p in the pound.
No doubt the Government will try to blame the Labour-controlled councils for rate increases, but they and the Minister are directly responsible for the rate increase that will inevitably result from the order.
I always understood that the Government's policy on industry was to try to bring more industry and jobs to Scotland. The order has come about as a result of a CBI lobby, because it is supposed to help bring industrial development to Scotland. In fact, it will give a massive rate rebate of millions of pounds to large multinational companies such as BP.
Central region alone will lose £7·78 million. Who will foot the bill? The Government expect other ratepayers, both domestic and industrial, to pay for the massive rate rebate that those multinational companies will receive. According to the COSLA statistics, other industries in Falkirk district will have to pay an extra £1·34 million to foot part of the bill for the massive rebate that will be handed out to the likes of BP. That could have a devastating effect on jobs in other industries in the Central region, where 20,000 people are already registered as unemployed.
That region has faced crises such as Glynwood, Caron and British Aluminium, now Alcan. Other industries such as Smith and Wellstood in Bonnybridge and places such as Denny, with unemployment of more than 30 per cent., are facing difficulties because the Government are refusing to intervene. The order is, therefore, a serious threat to industry and jobs in the Central region and, possibly, in other areas of Scotland.
I cannot understand why the local chamber of commerce has not raised its voice in louder protest. It seems to me that this order has been hatched up between chambers of commerce and the CBI, which is now absolutely incapable of defending Scottish industry. So is the Minister, who was a former paid lackey of the CBI before he was elected to this House.
It is interesting to note that the initial amendment emerged during the passage of what is now the Local Government (Miscellaneous Provisions) (Scotland) Act 1981. It was the Minister who first introduced it in a new clause.
I have a letter from his predecessor, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), dated 3 March 1981 and addressed to me. It states that
in replying to the debate on Allan Stewart's new clause in Standing Committee on 24 February I made clear that it would not be right to go ahead with a legislative amendment in the absence of any consultation with COSLA and with those authorities which would be most seriously affected … These consultations will be taking place as part of a continuing official investigation into the matter, which will be paying particular attention to the financial effects of any change in the valuation code, including the effects on the distribution of rate support grants. Yours ever. Malcolm".

Malcolm has never been mine, and now he has been promoted, or relegated, to the Foreign Office.
One of the worst effects of Galtieri's invasion was a reshuffle in the Scottish Office, which resulted in the Minister getting his wee bit of promotion and his hon. Friend the Member for Argyll (Mr. MacKay) being put in charge of the Health Service. They have both wreaked havoc in Scotland. They have destroyed more industry in Scotland than the Luftwaffe did during the last world war. It is serious, yet the Minister is laughing while jobs flit out of Scotland.
The order will destroy more jobs in Scotland and increase rate bills, not just for industrialists, but for domestic consumers. I hope that even at this late stage the Minister will see sense and withdraw the order and throw it in the bucket so that we can all go home before midnight without having to vote.

Sir Hector Monro: The Opposition's intemperate and irresponsible attacks have done nothing for their reputation, and should not sway the Minister in his determination to put the order through the House. We are dealing with external plant. Surely Opposition Members can see that any help we can give to industry will be of benefit during these difficult economic times.
There are a great many industries in Scotland, not just in the central belt, which have a great deal of external plant and they will gain from the order. They will have an opportunity to increase employment, which is something that we want desperately throughout Scotland. The Opposition have failed to see that the purpose of the order is to help industry. One would have thought that Opposition Members had not been sitting here listening.
To be fair to industry with external plant, we must approve the order. I anticipate that industries in my constituency and that of my hon. Friend the Member for Galloway (Mr. Lang), including ICI which has external plant, will benefit from it.
It is unfair to attack the Minister. He has had consultations. However, it does not mean that one must reach a compromise that is suitable to all. The Minister has to decide, after fair consultation, what is in the best interests of industry. If he had not received a great many representations from industry in Scotland presumably we should not be putting forward the order.
We have to keep this matter in a proper perspective and consider the impact generally on rates in Scotland and not just in the central belt, which is not the only part of Scotland that is affected. Will the Minister confirm that areas such as Dumfries and Galloway should have an increase of only 0·75p in the pound? We must equate that with the help it might provide in attracting industry or maintaining jobs in existing industry.
There was an extremely good settlement in the rate support grant that we debated last week. The Minister obtained a substantial increase in difficult economic times, close to the important announcement of last December's inflation rate. If, indeed, we can maintain inflation at around 5 per cent., the rate support grant decision will be seen in a very much better light than the Opposition tried to put it last week.
I would like my hon. Friend, too, if he has a moment in winding-up, to comment a little further on the hint that he gave of his interest in harmonisation of rating relative


to certain important issues at present, which he knows that I have raised with him in regard to caravan sites and to—

Mr. Canavan: On a point of order, Mr. Deputy Speaker. This has nothing to do with the order. The hon. Gentleman is cutting other hon. Members out of the debate.

Sir Hector Monro: The matter was raised by the Opposition Front Bench, perhaps when the hon. Member for West Stirlingshire (Mr. Canavan) was not in the Chamber or certainly when he was not listening. There was an exchange of argument across the Chamber with my hon. Friend the Member for Perth and East Perthshire (Mr. Walker). The hon. Gentleman is spoiling an already shockingly bad case that he has put forward.
I am glad that my hon. Friend the Under-Secretary is at least giving thought to the issue of rating caravans and other issues that are causing a great deal of contention relative to sports facilities at football grounds and to racecourses. It would be useful if, in the long run, such issues were not a disadvantage to Scotland.
I think that it is important that my hon. Friend, in winding up, emphasises again that we are dealing with industry throughout Scotland—not only in Orkney and Shetland and central Scotland but in my constituency and elsewhere, where there is external plant. Those areas will benefit, at an overall cost to the ratepayers of most regions, which is virtually insignificant in exchange for the possibility of increasing employment, which is our prime wish at present.
I am very glad that my hon. Friend has brought forward the order. I hope that it goes through tonight.

Mr. Allan Stewart: On the whole we have had a well-informed debate on this important order, but the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) did the House and himself a considerable disservice in his exchanges with my hon. Friend the Member for Perth and East Perthshire (Mr. Walker).

Mr. Bill Walker: Is my hon. Friend aware that the hon. Gentleman is known as the Walter Mitty of the Labour Front Bench? This evening clearly illustrates why.

Mr. Stewart: The House will note my hon. Friend's views. He made the position clear in response to the hon. Gentleman. All hon. Members will be very careful indeed about having any conversation at all in the Corridors with the hon. Member for Stirling, Falkirk and Grangemouth.
My hon. Friends the Members for Fife, East (Mr. Henderson) and for Dumfries (Sir H. Monro) raised the question of the Government's consideration of other anomalies in addition to the one that is the subject of the order before the House. My hon. Friend the Member for Fife, East made a valuable suggestion, that the Government should not introduce a coherent package on the anomalies without full discussion and a discussion document.

Mr. Martin J. O'Neill: If the Minister is suggesting that by a piecemeal process we are to have the erosion of the rate base of Scottish local authorities, how does he expect the local authorities to provide the infrastructure that will be

the means whereby industry can be attracted and kept within the area? That is the problem that Falkirk and the Central region face and that is why we are opposing the order.

Mr. Stewart: I assure the hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) that it is precisely because of issues affecting the rate base that we concluded that we should introduce a coherent consideration of the various anomalies that right hon. and hon. Members have brought to our attention. There will be a full opportunity for the House to consider any such proposals when our consideration is completed.
My hon. Friend the Member for Dumfries was right to remind the House that we should put the detailed points that have been made in the context of the general aim of the order. The general aim is simple—it is to bring the position on external plant and machinery north of the border into line with that south of the border. No hon. Member has suggested that the rating burden on internal plant and machinery should be increased in Scotland to bring it into line with that in England and Wales. If the hon. Member for Kilmarnock (Mr. McKelvey) is suggesting that, I suggest to him that he will find little support.
With regard to the general effect of the order, the hon. Member for Dunbartonshire, East (Mr. Hogg) mentioned the COSLA figure of £31 million and said that I had not given a figure. My notes suggest that I gave the figure of £31 million twice in my opening speech. I am sorry that the hon. Gentleman's attention was temporarily diverted at that moment.
Hon. Members have referred to consultations. My hon. Friend the Member for Dumfries was correct when he said that consultations had been extensive. Of course there has not been universal agreement as a result of those consultations but the consultations have been extensive.
With regard to the point of general principle, compensation or additional resources, I should like to emphasise that the Government's intention was made clear more than a year ago by my hon. Friend who is now the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), in Committee on the Local Government and Planning (Scotland) Bill when he said:
I think that we have emphasised all along that this is a question of the rateable consequences within a particular sector or within the whole Scottish rating system … But overall there is no such disparity or discrepancy. No convincing case has been put to the Government to suggest that this should not be seen as a redistribution of rating liability, as opposed to any other form of change."—[Official Report, First Scottish Standing Committee, 11 February 1982; c. 415.]
That is what my hon. Friend said in putting that principle to the Committee. It is worth noting that, on that point of principle, the Opposition chose not to divide on the clause.
I should like to deal with some of the points of detail that were put by right hon. and hon. Gentlemen. My hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) asked about the effects on Banff and Buchan. Both authorities qualify for support through the resources element of rate support grant. The reduction in rate income will therefore be made good in part. It is estimated that for the districts, Banff and Buchan, the effect of the order will be to increase rates in 1982–83—the only figures that we actually know about—by 0·1p. The same figure applies to


my hon. Friend the Member for Fife, East in respect of north-east Fife. In 1982–83 the effect of the order on Grampian region will be to increase the rate by about 0·75p.
The hon. Member for Dunbartonshire, East asked about Cumbernauld and Kilsyth. The effect there will be an increase of 0·4p. He also asked about Strathclyde, where the effect will be an increase of 0·7p. My hon. Friend the Member for Dumfries asked about Dumfries and Galloway. He is correct. The effect will be a 0·75p increase. The hon. Member for Stirling, Falkirk and Grangemouth mentioned 10·5p. My figure is 10·6p. I can confirm his understanding of the figure, and my point about rating resources per head stands.
We have agreed with COSLA that officials will review the effects on all authorities of the changes in valuation as figures become available from assessors. We shall review the arrangements for compensation in the light of that information during 1983. If COSLA brings forward agreed proposals for redistribution of grant, they will be reviewed extremely sympathetically by my right hon. Friend. There is no doubt that the order will be of assistance to key industries in Scotland and to those who wish to attract industry to Scotland, and I commend it to the House.

Question put:—

The House divided: Ayes 118, Noes 74.

Division No. 51]
[11.45 pm


AYES


Alexander, Richard
Gray, Rt Hon Hamish


Ancram, Michael
Griffiths, Peter (Portsm'th N)


Aspinwall, Jack
Grist, Ian


Atkins, Robert(Preston N)
Grylls, Michael


Banks, Robert
Gummer, John Selwyn


Beaumont-Dark, Anthony
Hampson, Dr Keith


Berry, Hon Anthony
Hannam, John


Best, Keith
Hawksley, Warren


Bevan, David Gilroy
Heddle, John


Biggs-Davison, Sir John
Henderson, Barry


Blackburn, John
Hogg, Hon Douglas (Gr'th'm)


Boscawen, Hon Robert
Hunt, David (Wirral)


Bottomley, Peter (W'wich W)
Hunt, John (Ravensbourne)


Boyson, Dr Rhodes
Jopling, Rt Hon Michael


Brooke, Hon Peter
King, Rt Hon Tom



Brotherton, Michael
Lamont, Norman


Bruce-Gardyne, John
Lang, Ian


Bulmer, Esmond
Lennox-Boyd, Hon Mark


Carlisle, John (Luton West)
Lester, Jim (Beeston)


Carlisle, Kenneth (Lincoln)
Lloyd, Peter (Fareham)


Carlisle, Rt Hon M. (R'c'n)
Luce, Richard


Clark, Hon A. (Plym'th, S'n)
Lyell, Nicholas


Clarke, Kenneth (Rushcliffe)
MacGregor, John


Cope, John
MacKay, John (Argyll)


Cranborne, Viscount
McNair-Wilson, M. (N'bury)


Dorrell, Stephen
McQuarrie, Albert


Douglas-Hamilton, Lord J.
Major, John


Dunn, Robert (Dartford)
Mather, Carol


Dykes, Hugh
Maude, Rt Hon Sir Angus


Eggar, Tim
Mellor, David


Fairbairn, Nicholas
Meyer, Sir Anthony


Faith, Mrs Sheila
Miller, Hal (B'grove)


Fletcher, A. (Ed'nb'gh N)
Mills, Iain (Meriden)


Fletcher-Cooke, Sir Charles
Moate, Roger


Fox, Marcus
Monro, Sir Hector


Fraser, Peter (South Angus)
Morrison, Hon C. (Devizes)


Goodlad, Alastair
Murphy, Christopher





Myles, David
Speed, Keith


Neale, Gerrard
Speller, Tony


Neubert, Michael
Spicer, Jim (West Dorset)


Newton, Tony
Spicer, Michael (S Worcs)


Onslow, Cranley
Sproat, Iain


Page, Richard (SW Herts)
Stanbrook, Ivor


Patten, John (Oxford)
Stevens, Martin


Percival, Sir Ian
Stewart, A.(E Renfrewshire)


Pollock, Alexander
Stradling Thomas, J.


Prentice, Rt Hon Reg
Taylor, Teddy (S'end E)


Proctor, K. Harvey
Thomas, Rt Hon Peter


Rathbone, Tim
Thompson, Donald


Rees-Davies, W. R.
Thorne, Neil (Ilford South)


Rhodes James, Robert
Waddington, David


Rhys Williams, Sir Brandon
Walker, Rt Hon P.(W'cester)


Ridley, Rt Hon Nicholas
Walker, B. (Perth)


Roberts, M. (Cardiff NW)
Waller, Gary


Roberts, Wyn (Conway)
Watson, John


Rossi, Hugh
Wheeler, John


St. John-Stevas, Rt Hon N.
Wolfson, Mark


Shaw, Giles (Pudsey)



Shepherd, Colin (Hereford)
Tellers for the Ayes:


Sims, Roger
Mr. Archie Hamilton and


Smith, Tim (Beaconsfield)
Mr. Tristan Garel-Jones.


NOES


Adams, Allen
Janner, Hon Greville


Alton, David
Johnston, Russell (Inverness)


Beith, A. J.
Jones, Rt Hon Alec (Rh'dda)


Bennett, Andrew(St'kp't N)
Lambie, David


Bray, Dr Jeremy
McElhone, Mrs Helen


Brown, Hugh D. (Provan)
McKay, Allen (Penistone)


Brown, Ron (E'burgh, Leith)
McKelvey, William


Buchan, Norman
MacKenzie, Rt Hon Gregor


Campbell, Ian
Maclennan, Robert


Campbell-Savours, Dale
McNamara, Kevin


Canavan, Dennis
McTaggart, Robert


Clarke,Thomas(C'b'dge, A'rie)
Marshall, Dr Edmund (Goole)


Cocks, Rt Hon M. (B'stol S)
Martin, M(G'gow S'burn)


Concannon, Rt Hon J. D.
Maxton, John


Cowans, Harry
Morton, George


Crowther, Stan
O'Neill, Martin


Cryer, Bob
Palmer, Arthur


Dalyell, Tam
Parry, Robert


Davidson, Arthur
Penhaligon, David


Davies, Rt Hon Denzil (L'lli)
Powell, Raymond (Ogmore)


Dean, Joseph (Leeds West)
Prescott, John


Dewar, Donald
Robertson, George


Dormand, Jack
Ross, Ernest (Dundee West)


Douglas, Dick
Rowlands, Ted


Eadie, Alex
Skinner, Dennis


Ewing, Harry
Soley, Clive


Foulkes, George
Spearing, Nigel


Freeson, Rt Hon Reginald
Spellar, John Francis (B'ham)


George, Bruce
Steel, Rt Hon David


Grimond, Rt Hon J.
Strang, Gavin


Hamilton, James (Bothwell)
Tinn, James


Hamilton, W. W. (C'tral Fife)
Wainwright, E.(Dearne V)


Harrison, Rt Hon Walter
Welsh, Michael


Haynes, Frank
White, J. (G'gow Pollok)


Hogg, N. (E Dunb't'nshire)
Wilson, Gordon (Dundee E)


Home Robertson, John



Homewood, William
Tellers for the Noes:


Howells, Geraint
Mr. Lawrence Cunliffe and


Hughes, Robert (Aberdeen N)
Mr. Hugh McCartney.

Question accordingly agreed to.

Resolved,
That the Valuation (Plant and Machinery) (Scotland) Order 1983, a copy of which was laid before this House on 17 January, be approved.

Orders of the Day — Northern Ireland (Financial Provisions)

The Under-Secretary of State for Northern Ireland (Mr. John Patten): I beg to move,
That the draft Financial Provisions (Northern Ireland) Order 1982, which was laid before this House on 14th December, be approved
This order is the latest in a series of such orders which are required at intervals of about two years. The last order was debated in 1980, when the then Minister introduced it with a speech lasting as long as three minutes, and the right hon. Member for Mansfield (Mr. Concannon) made his introductory remarks in the space of two minutes. I am afraid that my speech this evening will last a little longer because of the complexity raised by the order and the number of serious and interesting points that are encompassed in it. I hope that the House will bear with me.
The main purpose of the order, like that of all the orders, is to adjust, as necessary, certain limits that are imposed by statute on financial operations and to deal with a considerable number of other fairly routine matters of a financial nature. The adjustment of financial limits that we are discussing is designed to cope with all our foreseeable requirements until 1985.
I should make it clear, if it needs making clear, that the order does not deal with the appropriation of resources for the public service. Indeed, without specific approval of Parliament for financial allocations for the various services, the limits on issues set in the present order would, of themselves, be wholly meaningless.
I shall now describe the purpose of the various articles in the order. Article 3 provides for increases in two statutory limits on issues from the Northern Ireland Consolidated Fund for certain categories of expenditure. The first of those categories relates to issues to the agricultural loans fund to enable that fund to make loans to farmers. That fund, as will be familiar to right hon. and hon. Members from the Province, is in the process of being run down prior to termination. Expenditure relates purely to applications already in the pipeline.
The present limit of £18 million is to be increased to £20 million, which should be adequate to cover the borrowing needs of the fund until 1985–86, in which financial year, we anticipate, repayments by farmers will be sufficient to enable the fund to make repayments due to the Consolidated Fund.
The second category is for capital expenditure of the Northern Ireland Housing Executive. It plays a vital role in the Province. The limit applies to the net amount that may be issued from the Consolidated Fund to enable the Department of the Environment for Northern Ireland to make loans to the executive for its task. The present limit of £950 million is proposd to be increased to £1,300 million—a substantial and necessary increase.
Article 4 increases from £15 million to £25 million the limit on the amount of loans and grants that may be made by two Departments—the Department of Economic Development and the Department of Agriculture for Northern Ireland—to harbour authorities for the execution of harbour works. The new limit should be sufficient to accommodate expenditure as currently projected until March 1985.
Rather smaller, but none the less important, sums are involved in article 5, which increases from £600,000 to

£1,200,000 the amount of principal that can be guaranteed by the Department of Finance and Personnel in respect of certain borrowing by health and social services boards in Northern Ireland. The borrowing is for the purpose of on-lending to general medical practitioners for the provision of new and improved practice premises. The current limit, which was established in 1967, has been adequate until now, but recent signs are that there will probably be a greater interest in loans. It therefore seems prudent to increase the limit to the suggested level to accommodate the demand in the two years up to 1985.
Article 6 is interesting, because it abolishes the capital purpose fund, which in present-day Government financial terms is something of an anachronism. The fund was established in 1950 to provide a sensible means of carrying forward from one fiscal year to the next money voted for capital purposes. In the post-war period there was considerable difficulty in phasing expenditure, particularly for building, on large capital projects, because of the shortage of building materials. However, since the time when the capital purposes fund was introduced, the use of the fund has diminished. Under the current system of financial controls which the Government correctly exercise, it can fairly be said to have completely outlived its usefulness. No use has been made of it for some years.
Articles 7 to 16 are equally interesting, because they re-enact the provisions of the Government Loans Act (Northern Ireland) 1957 that are necessary to enable loans currently made from the Government loans fund to be made instead from the Consolidated Fund. Because of the effect of articles 7 to 16, the 1957 Act will be repealed and the Government loans fund thereby abolished. The fund was established in 1925 and, like the preceding capital purposes fund, it seems to have outlived its utility. It was designed to be an independent and self-balancing fund, but, in practice, for many years in the Province it has operated as an extension to the Consolidated Fund, which borrowed from the national loans fund and on-lent to the Government loans fund.
The transfer of the Consolidated Fund will simplify procedures and vastly improve the presentation of transactions to Parliament. I hope that the House will agree that this is a laudable object to pursue.

Mr. J. Enoch Powell: I wonder whether there has been some minor change since both the paper from which the Minister is reading and that which I have in front of me were compiled, because he referred to this matter as being dealt with by articles 7 to 16 of the order. It would appear that the Minister is dealing with part III, which, in the copy that I have procured from the Vote Office, consists of articles 7 to 15, article 16 being concerned with Ulster savings certificates. I do not know whether an article has disappeared somewhere.

Mr. Patten: I am glad that the right hon. Gentleman was paying close attention to my speech rather than to the interesting piece of paper that I was reading, to which I do not think he could have been privy. I did not pass the paper on to him, and I trust that the Finance and Personnel Department in the Northern Ireland Office is leak-proof and does not make available, even to such distinguished persons as the right hon. Gentleman, papers that are prepared for Ministers to base their remarks on.
I apologise for adding an additional article to articles 7 to 15. None the less, I hope that the right hon. Gentleman


and his colleagues will agree that it is common sense to get rid of ways of making capital funds available through a series of transactions, when they would be better presented in a simple way to enable the House to examine them more closely.

Mr. J. Enoch Powell: For the avoidance of any doubt or embarrassment in these suspicious days, when Government papers, even of an inoffensive and explanatory character, are apt to find themselves in the wrong hands, I point out that it was merely the natural deduction of a professional textual critic that if the Minister's speech presented the same problem as the explanatory document issued to hon. Members, there was likely to be a common source. If I identified the archetype wrongly with the brief from which the Minister was reading, I apologise, but no other deductions should be drawn from that.

Mr. Patten: I was drawing no deductions, merely chaffing, in passing, the right hon. Member, whose powers of textual criticism are well known in his scholarly past.
The transfer of lending functions to the Consolidated Fund will simplify accounting procedures and improve the presentation to Parliament of the transactions that are involved. I hope that no one disagrees with that laudable objective.
It is important for me to draw to the attention of the House one minor side effect of this set of articles, because I know that the right hon. Member for Down, South (Mr. Powell) and his hon. Friends, and Labour Members, are concerned about the terms and conditions of the Civil Service in the Province. I think that all hon. Members who are connected with Northern Ireland agree that we are extremely fortunate in the Civil Service that we have in Northern Ireland.
One minor effect of the articles will be to allow the lapse of provisions permitting the making of housing loans to civil servants in the Northern Ireland Departments. This is historically interesting, because provision for such loans was introduced in 1923 to facilitate the resettlement of officials obliged to move north on the creation of the new Administration—existing Irish officers, as they are now known in the trade, although few remain today. The original justification has long since disappeared and ready availability of finance for house purchase from other lending institutions is available. We feel that the continuance of these arrangements is otiose in the present circumstances.
It is suggested that the issue of Ulster savings certificates should be carried out by direction of the Department of Finance and Personnel. At present, changes are effected by subordinate legislation, but this practice, which has existed only since 1962, has given rise to serious administrative inconvenience. The time involved in the proper processing of such legislation makes it virtually impossible to achieve the changes at the same time as changes in the analagous and, if one likes, the lead national savings certificate issues. The move to effect these changes by direction brings Northern Ireland practice into line with that in Great Britain, to whose national savings certificate issues the Ulster savings certificates are absolutely and completely tied by practice.
Hon. Members will appreciate that while the order relates to matters within the responsibility of most

Northern Ireland Departments, it is essentially concerned not with policy—I stress the point—but with routine financial aspects that stem from agreed policy. In other words, we are concerned here with ways and means rather than with matters of substance. I commend the order to the House.

Mr. J. D. Concannon: I shall not detain the House long. The Minister asked, I believe, for the interventions that came from the Benches behind me. I wish that the hon. Gentleman's speech had been linked to the explanatory document made available to hon. Members. This would have saved the House the time that was spent searching for an article that did not exist. It is a minor point. It would, however, have saved a little of the "aggro" that occurred behind me.
The Opposition have no objection to the order. I thank the Minister for his fuller explanation. It does not alter our position on what is a routine matter. It is, however, with some regret that I observe from the explanatory memorandum that there are no implications for increased public expenditure. I wish that there had been such implications. One must keep returning to the state of the Northern Ireland economy and the unemployment level. Over 20 per cent. of the insured population is unemployed while recent forecasts suggest that the figure could be 26 per cent. by 1990. There has not yet been an opportunity to discuss the Government's expenditure plans. The trade unions, I understand, are to publish a plan containing ideas for the creation of 40,000 jobs in Northern Ireland. I hope that the plan can be used as a starting point for restoring some sensible policies. I recognise that I digress from the subject of the debate but I intend to miss no opportunities to discuss unemployment in Northern Ireland.
We have no objection to the order. I am simply giving the Minister notice of our intentions.

Mr. J. Enoch Powell: In these days, one is almost tempted to offer Northern Ireland Ministers appearing at the Dispatch Box a welcome home. It must be a pleasant change for Ministers not to find themselves either on the Floor, or before the Committees, of the Northern Ireland Assembly, addressing a body to which they have no responsibility and which has no responsibility for anything whatever. It is pleasant to see the hon. Gentleman in the House, which is the proper place for considering limits upon public expenditure and capital advances.
There are technical aspects to the order. There are also substantive matters involved. Although the effective decision to spend is taken in another form—by means of Appropriation Order in the case of Northern Ireland—some of the provisions made under Appropriation Orders would not be possible or, indeed, lawful without this order to raise the limit where necessary. So in that indirect sense we are authorising—although not directly, at any rate indirectly—future capital expenditure in the Province.
I shall deal first with three technical points. The first is the improved procedure for dealing with Ulster savings certificates. This is one of the simplifications brought about by the order that is wholly welcomed by my hon. Friends and myself. There is no longer—if there ever was—any justification for a separate organisation for the


sale of national savings certificates with an Ulster denomination, an Ulster title. This is one of the ways in which unnecessary administrative and other effort and expenditure are caused by separation for separation's sake between the same operation in Great Britain and in Ulster. Of course, the article makes only a minor administrative simplification, but it is a reminder of the savings that are available if and when the Government decide that, when an identical operation is being carried out in Northern Ireland and in other parts of the United Kingdom, it should, wherever possible, be carried out by the same authority, under the same legislation, and by the same administrative machine.
As we are here only concerned with an improvement of the technical administration of national savings, I shall not enter upon the larger question that I have been guilty of canvassing in years gone by as to whether savings certificates themselves are not an obsolete form of Government borrowing, in as much as they are both the dearest and the most liquid form of Government borrowing, and therefore, if there were no extraneous considerations, the most expensive form in which the Government borrow to meet their requirements.
In the early days of the movement it was widely—perhaps rightly—believed that there were indeed such extraneous factors that justified that separate, special, and specially costly form of raising funds. Certainly, in the context of the first war, it is probable that savings were tapped by means of the national savings movement—and this probably went on for several decades—which otherwise might not have been reached, and that some of the functions that the trustee savings banks perform, of providing an easy vehicle for saving by people of very limited means, were also served by national savings. However, I think that the time will come sooner or later, now that Lord Mackintosh has gone not only through his steps in the peerage but left us altogether, when national savings are recognised as an obsolete form of the borrowing of cash by the Government. Meanwhile the simplification and avoidance of duplication of legislative effort that are implicit in article 16 are to be welcomed.

Mr. John Patten: Does the right hon. Gentleman also realise that the Examiner of Statutory Rules may well be happy to see this change, because he has had cause to complain in the past on a number of occasions about the unfortunate delays that have been built into the system because of the very operation—the thing that we are seeking to remove?

Mr. Powell: I am grateful to the Minister for reminding me of that. Anything that makes the Examiner of Statutory Rules happy makes the rest of us happy because, perhaps more in Northern Ireland than in another part of the United Kingdom, his watchful eye is particularly valuable not only to hon. Members of this House—whose work to some extent he is doing—but to the Departments, which I think have come to rely on him as an extra check and a sort of benevolent policeman, invigilating over their secondary legislation. I am obliged to the Minister for his intervention.
When we come to the bulk of the articles, articles 7 to 15, it is to the good to be able to cut out, by disposing of the Government Loans Fund what was, if not a fifth, at any rate a sixth or seventh wheel to the coach.
As we are mentioning the Northern Ireland Consolidated Fund, it is a pity that it has not been possible at this stage to do what I hope will happen sooner or later—that is to consolidate the Northern Ireland Consolidated Fund with the Consolidated Fund. It is the freak of there being a separate Consolidated Fund for Northern Ireland, upon which the practices of the House in relation to money paid out of the United Kingdom Consolidated Fund do not bite, that a whole range of expenditure that would be brought to the attention of the House in the normal manner if it were met out of the United Kingdom Consolidated Fund is not so brought when it is met out of the Northern Ireland Consolidated Fund, although that itself is fed from the Consolidated Fund of the United Kingdom.
That giant anomaly is one to which I hope the Government will summon up sufficient courage sooner or later to give its attention. It is absurd that sums paid out of the Consolidated Fund should escape from the appropriate processes just by being paid into the Northern Ireland Consolidated Fund and then paid out again. The fact that this enabled us to have an entertaining debate on the money resolution and certain later proceedings on the ill-fated and ill-conceived Northern Ireland Bill of the last Session is not sufficient justification for the maintenance of this anomaly.
When we move away from treating Northern Ireland differently simply for the sake of doing so, with no corresponding difference in need or benefit to result from it, then we shall go beyond what is in the articles and have a Consolidated Fund of the United Kingdom which is such in reality as well as in name.
I hope that I shall not be grudged a few moments to refer to article 6 and the abolition of the capital purposes fund. Those who are connoisseurs of accounting and parliamentary control of public expenditure might, if they were so inclined, shed a silent tear over the passing of what was really a very good try at solving the conundrum of how, within the system of annual accounting which is essential to parliamentary control, to carry sums forward from one year to the next. If we have not succeeded in doing it in Great Britain, an answer was once found in the more secluded groves of Stormont. That answer was to pay the money into a capital purposes fund so that what would otherwise be annual expenditure came to be a borrowing from the capital purposes fund and could therefore, as borrowed money, be spent either in one year or in another year, thus solving the problem that has defeated the most determined efforts of local government and other financial authorities in Great Britain—how to carry sums forward from one year to another without irreparably damaging the annual basis of Government accounting and parliamentary accountability upon which, I am almost tempted to say our liberties, but at any rate our control over Government depends.
It is sad to see this gallant attempt pass from the Northern Ireland statute book but I do not think any of us at this time would reach out a hand to hold it back and keep it purely for its antiquarian interest. Suffice it to note that, in Northern Ireland, we have now come formally and fully on to that annual cash basis of accounting and control, without which there could be no national accountability by Government to Parliament.
With those remarks on the technicalities of the order, I pass to the more substantive matters raised by the contents of some of the earlier provisions of the order. I


do so confident that, although he has not yet shown his hand, the Minister has been well briefed by the Departments concerned about some of the facts that lie behind the advances set out in the earlier articles of the order, and can, therefore, respond to the many innocent and fairly obvious questions that I and I am sure some of my hon. Friends will wish to put to him.
The first question concerns the agricultural loans fund. As best as I can understand the explanatory document provided to hon. Members, and the secret document that tallies with it exactly, which was provided for the sole and exclusive use of the Minister in explaining the order to the House, in the near future there will no longer be a net inflow of capital into the agriculture industry in Northern Ireland from public sources through this channel, as the explanation looks forward to the time when repayment will balance outflow, and there will be no net increase in advances. It would be helpful if the Minister would say whether that understanding is correct, and also whether there are no further sources from which a net addition is being made to agricultural capital in Northern Ireland, or whether other channels of agricultural capital from public sources have replaced the agricultural loans fund.
My second point relates to advances for housing expenditure, where it is accepted that the requirements of the next two years, from March 1983 to March 1985, will be an additional £350 million of net advances. That implies an expenditure on average of £175 million net on capital account by the Housing Executive in each of the next two years. I think that the Minister can confirm—it would be good if he could do so—that that is a net figure, because it would be wrong for anyone to say that the total capital expenditure on housing by the Housing Executive envisaged for each of the next two years will not exceed £175 million a year.
I hope that I am right in saying that it will exceed that sum considerably, if only because, owing to the brisk sale of houses to tenants and others that was initiated by the previous Administration, whose prejudices in this matter happily did not extend to Northern Ireland—an extremely beneficial and popular process—large sums of capital are becoming available outside that channel for use by the Housing Executive. If the Minister can supply the House with the real net capital expenditure anticipated during the next two years on housing in the Provice, that would avoid misunderstandings and would be helpful.

Mr. John Patten: I would happily confirm to the right hon. Gentleman that of course the sums given in the order do not in the end tie my hon. Friend, who is responsible for the Department of the Environment, to a particular level of expenditure. But I am sure the right hon. Gentleman will appreciate that neither can I this evening commit my hon. Friend and my right hon. Friend the Secretary of State to some level of capital expenditure in the public expenditure round after next. That goes completely against current Government practice, as he well knows.

Mr. Powell: I have not wanted to place any temptation in the way of the Minister, but since his right hon. Friend had been able to anticipate the volume of net issues from the Consolidated Fund during the next two years, I thought that perhaps his colleague might have been able to anticipate the total of capital requirements towards which he had estimated that those sums were necessary. Indeed,

it is difficult to see how that estimate of net requirement from the Consolidated Fund could have been arrived at with any degree of accuracy unless the gross total of capital requirement of the Housing Executive had been anticipated.
The Minister is in a very suspicious mood where I am concerned tonight. I am sorry about this. I assure him that there is no sound cause for it. I was not endeavouring to elicit from him some injudicious revelation of calculations that were still held close to the chest of the Department of the Environment and the Housing Executive. I simply hoped to elicit a corresponding gross figure to the net figure of £350 million of issues over two years from the Consolidated Fund to the Northern Ireland Housing Executive. As I have been frustrated in that endeavour—indeed, as it has been repulsed as an attempt to pry behind the veil of secrecy that shrouds the operations of the Department of the Environment—I am afraid that my colleagues and I will simply have to go to our constituents and so far as possible explain to the media, who are watching these figures closely with the object of reporting them tomorrow morning not only in the columns of the newspapers but in "Good Morning Ulster" and other such programmes which had long anticipated breakfast television. We shall be able to assure them that these are not by any means the total or maximum capital sums that will be expended on housing in the Province in the next two years.

Mr. John Patten: I hope that the right hon. Gentleman, who is known, if he is known for nothing else in this Chamber and in the United Kingdom at large, as being fair-minded, will also point out, should he be favoured with an invitation to appear on "Good Morning Ulster" or one of the other programmes, that my hon. Friend the Under-Secretary responsible for the Department of the Environment is vigorously pursuing a housing policy that means the building of more and more houses and spending substantial sums of money, and that the purposes of this order are to make prudent future provision for necessary loans.

Mr. Powell: Encouraged by that compliment from the Minister, my hon. Friends and I will have to assure the public in Northern Ireland that in the next two years the capital spent by the Housing Executive will be £350 million plus X, X being a figure that even the House of Commons has not been given. The thought has just struck me that this fact may be deliberately being withheld in this Chamber so that it can be doled out to a Committee of the Assembly as part of the hand-feeding of that monstrous creation, which is the principal occupation of the Secretary of State and his minions. So perhaps the X that we are obliged to insert into any statement we make will in due course be filled in at a Committee of that irresponsible body to which the Minister is not responsible.
However, I draw a veil over that matter, and pass to another question about which I hope the Minister will not be so inhibited in providing information—the advances to general medical practitioners for practice premises. He indicated that there had been an increase of interest among the medical profession in Northern Ireland in securing advances for this purpose. This is a matter which, from the early days of the Health Service in Great Britain and in Northern Ireland, has been of great interest and at one stage of considerable political controversy. Since a big


increase is now being provided for in the maximum sum that can be outstanding in terms of loans for the improvement of practice premises I hope the Minister, when he winds up, will be able to give to the House at any rate a brief indication of the progress that has been made and the volume of outstanding applications and plans that lie ahead.
To what extent is the general practitioner in Ulster now serving his patients not in premises that are traditionally associated with the consulting room of the general practitioner in country areas in days gone by but in new, purpose-built or purpose-provided premises towards which these loans go? Secrecy and loyalty to colleagues will not prevent the Minister from answering that question from his own Department, thereby giving the House an interesting if somewhat nocturnal insight into the improvement of practice premises in the Province.
I come last—

Mr. Harold McCusker: Ah!

Mr. Powell: I do not know whether that was an expression of regret or relief. Perhaps I can settle that difference with the hon. Member later. At any rate, whether to general regret or satisfaction, I come last to loans to harbour authorities.
I have a minor and major point to make. The loans and grants are made by the Departments of Economic Development and Agriculture. I probably ought to know the answer to this, but others may not. How is the function of grant-aiding harbour works divided between those two Departments? That is my technical question.
My second and concluding point is to place emphasis on the outstanding importance for Northern Ireland—in all possible respects, including economic development—of the improvement of its surface communications with the rest of the United Kingdom. That does not everywhere depend upon harbour works, but the Minister will readily concede that in all the main ports of access to Northern Ireland harbour works are an important factor in the efficiency of communications and transportation between the Province and the rest of the United Kingdom. Additional harbour works at the major Northern Ireland terminals could improve the efficiency of those communications.
The Minister probably knows that I have a special interest in this matter, in that the port of Warrenpoint, which has been modernised at considerable public expense in the last decade or so, cannot give the full service that the facilities there ought to provide, both to the economy of Northern Ireland and indeed to the Irish Republic, unless there is an improvement in the access to that port through Carlingford lough.
The outlook today has considerably improved since the matter was last debated or even mentioned in the House, in that the estimated cost of carrying out the necessary work has been reduced from about £10 million to about £4 million. As a result, the hopes of the Northern Ireland Economic Council, which has pressed this matter for a number of years, and of those of us who from far and near look to the improvement of the traffic through Warrenpoint for a regeneration of employment and activity in the whole of that area—as well for as an

additional contribution to communications between the Province generally and Great Britain—have been largely encouraged.
We find ourselves hoping that before the additional sum in the higher limit is expended, the initial outlay at any rate will have been made upon that improvement of the access to Warrenpoint harbour, which after many years' study appears at last to be coming nearer to the stage of practicability and implementation than many of us had feared. On that hopeful note, I offer the support of my hon. Friends and myself to the order which is before the House.

Mr. William Ross: My right hon. Friend the Member for Down, South (Mr. Powell) spoke briefly on the questions which arose on the Development Loans, Agriculture and Fisheries Act 1968, and pointed out that in the Government's view there was a balancing act ahead where the inflow and outflow would be equal, and that £2 million only would be required to cover extra loans until that happy occurrence.
The original Act specified many purposes for which agriculture development loans can be made:
Development and improvement of agricultural land and livestock and of land suitable for forestry or woodland purposes.
There are then
The purchase (including hire purchase) and installation of agricultural machinery … the establishment or development of small rural and agricultural industries".
and many more.
All those matters are costly, and it appears to me that £2 million extra and an aggregate of £20 million will not go far.
I hope that the Minister will be able to tell us precisely how that expenditure will be met, whether the Government expect the investment in agriculture in Northern Ireland to fall to such a degree that it can be met from this fund, and what other sources are available from which farmers may borrow.
The second matter that I wish to ask the Minister about is found in article 11 of the order. We read:
If a borrower of a government loan makes default—
(a) in paying any money due in respect of the loan for a period exceeding 10 days after the money becomes due"—
then—
the entire amount of the principal outstanding under the loan together with—
(i) interest on it at the appropriate rate or rates … shall become payable and shall be paid by the borrower to the Department on demand.
That is different from what was contained in the original Act of 1968. I should be interested to know which the Minister will hold over the head of the farmer or the agriculturist who finds himself in the unfortunate position of having a cash-flow problem, which is not unknown in agriculture. Anyone who has grown potatoes and tried to sell them in Northern Ireland this past season knows how serious the difficulties are.
Section 6(2) of the original Act said:
Where any instalment of principal or interest or both principal and interest due on foot of any loan made under this Act is more than 31 days in arrear additional interest at a rate not exceeding 6 and one half per centum per annum shall, notwithstanding any enactment or rule of law to the contrary, be chargeable on the amount of such arrears and shall be recoverable therewith; but the Ministry of Finance may in such cases as it thinks fit direct that the payment of such additional interest may be waived.


There is a vast difference between the attitude displayed by the original Act and that which is set forth in the order. The order contains much harsher provisions, which could in certain circumstances bear very heavily indeed upon the farming commumity in Northern Ireland. I would like an assurance from the Minister that if not the letter of the original Act at least the spirit of it will prevail in future. The original Act, I believe, took fully into account the difficulties of the agricultural community in Northern Ireland. That willingness to understand the difficulties of the people concerned seems to me quite absent from the present enactment. I am just curious what the situation will be in the future.

Mr. John Patten: I welcome the welcome of the right hon. Member for Mansfield (Mr. Concannon) for the order, albeit qualified by his concern for what he sees as a correct and adequate level of public expenditure in the Province. I hope that, even if we do not necessarily agree on a figure, we can at least agree that the order allows in the future increased capital expenditure in an area of the United Kingdom which needs the help of the rest of the United Kingdom in the problems which face it. I am grateful to the right hon. Gentleman for what he said.
I turn, first, to the three technical and then the four more substantive points that the right hon. Member for Down, South (Mr. Powell) raised. I am grateful to him for his welcome for the changes in the way in which Ulster savings certificates are to be treated in future.
On the right hon. Gentleman's second point, I am familiar with the arguments about the need, as he sees it, to have an integrated Consolidated Fund for the whole of the United Kingdom. I shall certainly bear in mind what he has to say and pass on his views to my right hon. Friend the Secretary of State.
But, however inconvenient—setting aside for one moment the constitutional proprieties, which I know bear heavily in the right hon. Gentleman's argument—from time to time we in this House should perhaps be able, under public expenditure spending programme No. 17, to isolate the high level of public expenditure per head in the Province. Although there are arguments about that, I think that it is commonly accepted that it is more than 30 per cent. higher per head in the Province than in the rest of the United Kingdom.
However inconvenient that fact may be for us, it also strikes me as a fact of considerable convenience, since it allows us by the very isolation of that sum to demonstrate to the people of the Province—the right hon. Gentleman's constituents in Down, South, and his hon. Friend's constituents in Londonderry, and the constituents of the hon. Member for Mid Ulster (Mr. Dunlop)—the commitment of the United Kingdom to the Province. It may be constitutionally incorrect—who is to say; that is a matter for debate—it may sometimes be unfortunate in terms of arguments, but I think that it is also fortunate, because it allows us to demonstrate to the people of the Province the considerable commitment of the people of the whole of the United Kingdom to their welfare via public expenditure.

Mr. J. Enoch Powell: I take the point that the hon. Member is making, but I think that he will agree that it is not directly connected with the question whether there should or should not be a Northern Ireland Consolidated

Fund. It would be perfectly possible to account separately for public expenditure in Northern Ireland, to show it separately and to present it separately, even if the sums were being paid out of the United Kingdom Consolidated Fund, which is the narrower point that I was making.

Mr. Patten: I accept that point, although it is difficult for any other part of the United Kingdom to separate public expenditure plans as the right hon. Gentleman suggests could easily be done for the Province should there be one Consolidated Fund. I am also grateful to the right hon. Gentleman for his welcome tinged with sadness to the abolition of the capital purposes fund, that interesting historical attempt to do a set of things with regard to capital expenditure that many people would still feel are desirable—the rolling over of capital expenditure from one year to another.
One substantial point related to agriculture. I should like, in replying to the point of the right hon. Member for Down, South, also to associate in my remarks the questions raised by his hon. Friend the Member for Londonderry (Mr. Ross). In answer to the direct question posed by the right hon. Gentleman, I can say that there will be no more direct lending from this fund in future. In answer to his second question, there are no other public sources of funds of this type for loans to the agricultural sector. I dare say that he and his hon. Friend will remember the considerable public interest and concern in late 1979 when this issue was first aired. There was full consultation with the Ulster Farmers Union and it was decided after considerable argument following that consultation that the fund itself should be run down, because in the Government's view there are adequate sources in the private sector of loans that can be supplied to agriculture.
As for the application of the present order and any previous legislation, if the hon. Member for Londonderry knows of cases, I should be grateful if he would draw them to the attention of my hon. Friend the Minister of State responsible for the Department of Agriculture in Northern Ireland.
On housing, I have said all that I can possibly say in answer to the questions posed by the right hon. Member for Down, South. I can say a little more about his third question, which related to the adequacy of the guarantees made available for loans from the Department of Health and Social Services. It is important to realise that the loans to general practitioners for the improvement of their practices and the buildings in which they are housed are not made directly from Government. There is no element of public subsidy. The loans gained from the private sector are underwritten—it has been a successful process—to allow for the improvement of facilities in general practice.
I do not have the exact figures in my head but I would hazard a guess that in the Province more than 60 per cent. of all general practitioners are now housed within health centres. I shall write to the right hon. Gentleman to give him the exact figures in a comparative framework because it is a considerably higher proportion than obtains on this side of the water. Generally speaking, the move of general practitioners into group practices, and more particularly into health centres, has been remarkably successful. There have been integrated units concerned with health education and with the dissemination of a great deal of information about health and general welfare.
There have been a few failures and a few difficulties. The Shantallow health centre in the constituency of the hon. Member for Londonderry has lain empty and vacant for many years, although general practitioners at one stage said that they wished to go into it. We have had to put it to other uses. I am sure that all right hon. and hon. Gentlemen are familiar with the fact that general practitioners are independent contractors with the Health Service. In the end, they can decide whether or not to go into a health centre.
The right hon. Member for Down, South referred to harbour improvements. The grant aiding of improvement works to harbours when made by the Department of Economic Development, which used to be the Department of Commerce, is made to ports that are primarily commercial, whereas grants by the Department of Agriculture in Northern Ireland are made to harbours primarily concerned with fishing. There is a grey area of overlap but that, pragmatically, is how it works.
I suppose that Warren Point, which is in the constituency of the right hon. Member for Down, South, would be a commercial undertaking. I cannot give any details about the future of that scheme. It is a detailed policy matter for my hon. Friend the Minister of State. I welcome the interest that the right hon. Gentleman has shown both in his speech tonight and in his speech on 10 December 1980, when he spoke about the transportation problems of the Province.
This sensible order makes an important provision available for the future of the Province until 1985 and I believe that it will be broadly welcomed. I commend it to the House.

Question put and agreed to.

Resolved,
That the draft Financial Provisions (Northern Ireland) Order 1982, which was laid before this House on 14th December, be approved.

Orders of the Day — SCOTTISH AFFAIRS

Ordered,
That, in the course of their consideration of the matter of Education: 16 to 18-year-olds in Scotland, the Scottish Grand Committee may meet in Edinburgh on Monday 7th February at half-past Ten o'clock.—[Mr. Goodlad.]

Orders of the Day — Maternity Provision (Kidderminster)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodlad.]

Mr. Esmond Bulmer: In 1986 the consultant obstetric service that is currently operating at Bromsgrove general hospital will be transferred to Woodrow hospital at Redditch. This move has the most serious implications for my constituents. At present over 40 per cent. of mothers-to-be in my constituency go to Bromsgrove for the birth of their children. This entails a considerable journey and one which too often is undertaken after labour has begun. I shall return to these problems later.
The immediate concern that I wish to express is that no provision has been made in the planning of Woodrow for the continuation of an inpatient obstetric service for my constituents. Even if it had been, they would feel strongly that a journey of a further eight miles posed problems that should be avoided.
In an Adjournment debate two years ago I asked where mothers from the Kidderminster district would have their babies in 1986. I was given no answer then and I have received no answer up to this time. It is for this reason that I raise the matter again now.
I need hardly stress to my hon. Friend the Under-Secretary of State the crucial importance attached by the local community to the provision of comprehensive maternity services within the area of Wyre forest. A decision is required within the next six months if Kidderminster is to have a consultant maternity unit in time to replace that lost at Bromsgrove. This is not to say that some progress has not been made in the past two years.
The regional health authority has now accepted that Kidderminster general hospital should have a consultant maternity unit. Present planning, however, gives a completion date of 1992, six years beyond the date when the Bromsgrove general hospital consultant unit is to be transferred to Redditch.
Kidderminster has now been established as a district health authority and the strategy document prepared by the West Midlands regional health authority states unequivocally that
The District General Hospital should provide for the whole population of this District a full range of specialist treatment including a maternity unit.
I am concerned at the long delays that have been experienced in extracting from the region the decisions that are necessary. As long ago as 1974 the need for a consultant unit was identified, and this was not questioned until 1978. At this point the regional health authority, which had previously been committed to the development control plan, raised fundamental questions about the viability of a consultant obstetric unit because of the size of the catchment population. It asked the area health authority to produce a strategy for obstetric services. The area health authority set up a sub-committee to examine these problems in detail. The committee confirmed the original strategy of creating GP maternity facilities at the general hospital site and established that the Kidderminster district should have a consultant obstetric unit. These recommendations were unanimously accepted by the area health authority, but the region's response was to give the matter "unresolved issue" status.
On 6 March 1980, after I had pressed the issue in the House, the then chairman of the regional health authority, Sir David Perris, wrote to me to say that the region had now agreed that the Kidderminster catchment area justified a consultant unit. He pointed out, however, that further problems remained to be resolved, such as the staffing of the unit and the provision of back-up facilities. He also pointed out that the unit did not feature in the region's strategic capital programme. Further exchanges around these issues have taken place in the past two years. It now appears that phase 6 of the Kidderminster hospital development plan, which includes the consultant unit, may start in 1988. That is clearly too late.
Early last year, Sir David Perris, in a meeting with Mr. Malcolm Cooper, the chairman of the Kidderminster and district health authority, undertook that discussions between region and district on the future of Kidderminster's obstetric service after 1986 would take place in the autumn of last year with a view to finding a mutually acceptable solution. Substantive discussions have yet to take place. It is perhaps unfortunate that the West Midlands region has 22 districts with which to deal. That inevitably makes for substantial slippage in timetables.
I understand that a meeting between Mr. Cooper and the new regional chairman will take place shortly. Mr. Cooper will press the case for bringing forward the building of the consultancy maternity unit so that when Bromsgrove closes its unit, Kidderminster can offer a full service. He will have the backing of the local community, especially that of the Kidderminster branch of the National Childbirth Trust, which has made a close study of the problems to which I refer. In the meantime, the Kidderminster and District health authority has produced an option paper that explores the various choices that may be open, should Kidderminster hospital not be able to accept those mothers-to-be who would have gone to Bromsgrove.
A recent survey of deliveries to residents of the Kidderminster district show that more than 40 per cent. went to Bromsgrove, 18 per cent. to Ronkswood, Worcester and a small number to other hospitals in Birmingham and Dudley. None of those hospitals has planned to provide for Kidderminster mothers after the Bromsgrove maternity service moves to Redditch.
The option paper explores the possibility of Kidderminster mothers going to Redditch and Wordsley hospital, Stourbridge. It also examines the possibility of adapting phase 5 of the development plan for Kidderminster hospital, which includes the provision of a GP maternity unit and retaining the Croft to provide the extra beds. It finds serious objections to each of those options.
The region will obviously wish to examine that paper in detail, but I believe that it will come to the same conclusions as the Kidderminster and District health authority, which is that there is a need to bring forward the starting date for phase 6 so that Kidderminster hospital will be able to offer a full range of services, including a special care baby unit and additional theatre capacity when Bromsgrove closes.
It does not seem to make any sense to involve neighbouring hospitals in unplanned and possibly expensive short-term measures to provide a service for Kidderminster mothers when the need for Kidderminster hospital to have a consultant unit is already accepted.
The Shropshire health authority has recently issued a consultative document on the future of maternity services in south Shropshire, which states that the South Shropshire health authority will add its full support to the need for a consultant unit at Kidderminster hospital. Its proposal to close the Ludlow maternity unit permanently makes clear the need for Kidderminster to enlarge its catchment area so that many mothers in south Shropshire can attend Kidderminster hospital, which is much closer to their homes than Wolverhampton or Shrewsbury.
The chairman of the Kidderminster and District General Practitioners' Association has written to me, underlining the importance of bringing forward phase 6. He rightly points out that an obstetric emergency has no equal in its demand for immediate and expert intervention. Although all GPs have received basic obstetric training, with the trend of fewer deliveries being supervised by GPs it becomes even more essential that specialist facilities are available if a quite unacceptable number of women are not to be transferred in labour or run the risk that help will not arrive in time. He listed several recent serious incidents.
The first was a severe post partum haemorrhage at the Croft as a result of a torn cervix. A telephone call to Bromsgrove asking for expert help resulted in a doctor arriving 50 minutes later. The second case was a patient in labour who had a prolapsed cord. She had to be transferred to the general hospital where she underwent a caesarian section. The move resulted in considerable disruption of the operating list at the general hospital and exposed the patient to incalculable risk. The third case was of an ambulance that crashed when transferring a patient in labour. After being delivered by caesarian section at Bromsgrove, the unconscious patient was transferred to Smethwick neuro-surgical unit. The fourth case was a patient who suffered a post partum haemorrhage. Despite numerous telephone calls to Bromsgrove for assistance, it was not forthcoming. Eventually the doctor and his partner managed to stabilise the patient sufficiently for her to be transferred.
It is obviously highly undesirable for mothers to be transferred when in labour. Last year, 52 were transferred to Bromsgrove after labour had started. I have received letters from constituents describing their experience. I should like to quote two. The first wrote as follows
After a long and, at times, very painful first stage of labour, lasting nearly twenty-four hours, the doctor found on examination that the baby's head needed turning and, therefore, decided that the special facilities at Bromsgrove were necessary.
A transfer by ambulance, with a midwife in attendance was arranged.
By this time, I was high on a mixture of 'pethidine' and 'gas and air'. Exhausted, frightened and unable to control the urge to push, the ten mile journey to Bromsgrove, which took half an hour, not only prolonged the agony, but caused added discomfort due to the motion of the vehicle. On arrival at Bromsgrove, I was on the verge of hysteria and had to be given a general anaesthetic to permit the doctor to deliver my baby with the assistance of Keillard Forceps. Christopher was born 1½ hours after the decision to transfer had been made.
This unnecessary additional time in labour caused a great deal of extra internal bruising, which was so severe that I found it impossible to sit for the first two weeks or so. This frightening and painful experience is something I could not bear to repeat, and an obstetric unit in Kidderminster would prevent this.
The second mother wrote:
I was admitted to the Croft Maternity Hospital early evening of 3rd April 1971 expecting my first baby. My labour continued normally until early afternoon of the next day when I was taken into the delivery room. I was very tired and glad to think it was nearly all over. After a while my contractions were slowing and


the baby was not moving down. The doctor was called, who attached a drip to try to speed up contractions. Nothing happened so he decided to move me to Bromsgrove. I was very upset at the prospect of the journey and very tired.
The ambulance men arrived and with great difficulty carried me down 2 flights of steps on a stretcher complete with drip and labour pains. The midwife accompanied me in the ambulance while my distraught husband followed in the car. During the nightmare journey I was having contractions, trying to hold the gas and air mask, breathe correctly and hang on for dear life to stop me falling off the bed. Twice I very nearly fell off as the beds were so narrow, I was so big and the roads were so bad. The journey seemed to last a lifetime during which I became more worried, upset and frightened. Eventually we arrived at Bromsgrove and a suction machine was used to no avail after which my very distressed baby girl was delivered by caesarian section. She was kept in a special care baby unit for 10 days. The skill and medical care I received was first class but the journey not only prolonged a difficult birth but was emotionally so distressing that the thought of other women having to go through this experience is intolerable.
I am sure that my hon. Friend the Minister wishes, as I do, to do everything possible to ensure that those experiences are not repeated. I am sure that he will also accept that serious problems occur for families who have to rely upon public transport to travel considerable distances, and that the costs involved may push some mothers-to-be into missing ante-natal visits. The cost of the return journey to Bromsgrove is £3·60 and to Redditch is £4·60. The journey to Bromsgrove takes four hours travelling and to Redditch five hours.
Serious problems can also, of course, arise if mothers are discharged before their babies. If daily visiting is as difficult as it would be if a mother had to travel from Kidderminster to Redditch, the possibility exists of a breakdown in a proper relationship between mother and child. I hope that my hon. Friend will visit the Kidderminster hospital and the Croft maternity home to learn at first hand of the problems that I have described. He will also, I am sure, be impressed as I have been, by the standard of care and the dedication of the staff that he will meet there.
I hope that, meanwhile, my hon. Friend will add his weight, in conversations with the regional chairman, to the case that I have made tonight and ensure that it is examined as a matter of urgency.

The Under-Secretary of State for Health and Social Security (Mr. Geoffrey Finsberg): I congratulate my hon. Friend the Member for Kidderminster (Mr. Bulmer) on securing this debate. He has explained graphically why a consultant obstetric unit is needed at Kidderminster general hospital. He has also produced telling arguments for bringing forward the planned date for the new unit. I felt that his speech demonstrated the great care with which he has researched the facts and the genuine concern that he feels about this important subject.
The last time that the provision of maternity services in Kidderminster was debated in the House was in an Adjournment debate initiated by my hon. Friend on 14 January 1980. The difficulty then was that the West Midlands regional health authority, which was—and still is—responsible for all major National Health Service capital projects throughout the region, had not agreed to a consultant obstetric unit being built at Kidderminster.
The question then was not when the unit would be built or whether the proposed starting date could be brought

forward,, but whether the population of Kidderminster was sufficient to warrant building a consultant obstetric unit there at all. Events have clearly moved on, for the question now is whether the planned starting date of 1988 can be brought forward.
I have taken the opportunity to re-read the forceful arguments put forward by my hon. Friend in that debate almost three years ago. He was as persuasive then as tonight in seeking to advance the interests of his constituents.
My hon. Friend has recalled the long history to this case. I will not repeat what he has said, save to say that at the meeting of the Kidderminster and district health authority on 2 December 1982 the authority considered the draft consultation document entitled "Maternity Services 1986–1990". The consultation document had been drafted following a planning seminar of health authority members and set out various options for providing consultant obstetric services for Kidderminster mothers between 1986 and 1990. When the document was introduced, the health authority chairman said that the issue had been the focus for public discussion for some time and that he saw the consultation process as a formal exploration of the options.
The intention was to consult all interested organisations and individuals as quickly as possible so as to have a clear strategy agreed in readiness for discussion with the regional health authority later this year. I understand that the document has been widely circulated and that recipients have been invited to submit comments by 4 February—a week on Friday. As I have said, it is a consultative document which explores a number of options.
However, such was the strength of opinion expressed by members at the health authority meeting on 2 December that a letter was dispatched straight away—on 7 December—to the regional health authority saying that the only viable option was to bring forward phase VI of the Kidderminster development. The letter also said that the issue would need to be discussed urgently. The regional health authority has not replied to the letter, but it has indicated that the consultative document will form the basis for discussion at the forthcoming district review meeting scheduled for June this year.
I have seen a copy of the consultative document and of the letter sent to the RHA. I have also seen copies of several letters, which have been sent both to the RHA and the Department, pressing for phase VI of the Kidderminster development to be brought forward. Everyone of those documents supports what my hon. Friend has just said. However, as he knows it is not for me or my ministerial colleagues based in London to attempt to determine the relative priority of building schemes in the west midlands region. That always has been the regional health authority's job and responsibility.
The region must weigh the needs of Kidderminster against those of the other 21 district health authorities in the region. In the west midlands that is no easy task, because the region as a whole is relatively deprived in terms of its capital building stock and it has a very full capital building programme. Phase VI of Kidderminster general hospital, I am told, could be brought forward only at the expense of some other project or projects which, up to now, have been accorded a higher priority.
I shall now deal with the maternity services that are available to Kidderminster mothers. The health authority's


consultative document shows that in 1971, 430 of Kidderminster's 1,200 babies were born in the local general practitioner maternity unit and that 517 were born at Bromsgrove general hospital. However, the consultant obstetric unit at Bromsgrove general hospital is due to close in 1986, as my hon. Friend said when the new Bromsgrove and Redditch district general hospital opens. The new hospital is being built at Redditch, which is a further six miles away from Kidderminster, adding about 10 minutes to the journey.
As I understand it,—my hon. Friend stated this clearly—this is the nub of the problem. From 1986 until 1990 at the earliest, Kidderminster mothers will have to travel further for in-patient consultant obstetric services and, as yet, no firm arrangements have been made to ensure that they have ready access to such facilities. The consultative document points out that the new hospital being built at Redditch is intended to serve the population of Bromsgrove and Redditch, particularly those in the growing new town of Redditch. Nevertheless, the possibility of Kidderminster mothers using the new Bromsgrove and Redditch hospital from 1986 until Kidderminster's own consultant obstetric unit is built is one of the options explored in the consultative document.
The document also discusses other options, including the possibility of using the new 118-bed maternity unit at Wordsley hospital, Dudley which is expected to open in 1986–87 and is slightly closer to Kidderminster than Redditch is.
The difficulty facing Kidderminster mothers is not that they are losing a consultant obstetric unit. Far from it; they are due to get their own unit in about 1990. The problem is that the unit they have been using up to now is moving about six miles further away and for a period of about four years, while their own unit is being built, they will have to travel further.
Not all the mothers will be affected by this, as the general practitioner maternity unit in Kidderminster is being retained. However, a good many will be affected, and of course I am well aware, as my hon. Friend has so movingly and graphically illustrated, that these will be the less straightforward cases. However, as I have said, these patients have had to travel to Bromsgrove general hospital or elsewhere up to now, and the case for Kidderminster having its own consultant obstetric unit has only recently been accepted by the regional health authority.
No one wants to see patients, particularly maternity patients, travelling any further than they need for proper hospital care. I know that the regional health authority shares that view and that before the obstetric unit at Bromsgrove general hospital closes in 1986 everything possible will be done to find a solution to this problem, a solution that is acceptable to both the health authority and to the people of Kidderminster. I am sorry to repeat myself, but the task of finding that solution falls to the regional health authority and the district health authorities concerned, not to my Department.
They are far closer to these things than the Department could ever be and are in a much better position to

determine local priorities. That is the job that we have appointed them to do, and I firmly believe that, wherever possible, they should be left to get on with it.

Mr. Bulmer: My hon. Friend has recently made some money available to the West Midlands regional health authority, which has defined some priorities, of which maternity is one. When granting this extra money, did my hon. Friend specify how it should be spent?

Mr. Finsberg: What we have said on this occasion—and I shall send a copy to my hon. Friend if he has not seen the press notice that set this out—is that one of the things for which the money should be used is to refurbish a poor stock of hospital building. The other part of the money was to be concentrated on the priority services. As my hon. Friend has rightly said, the West Midlands feel that maternity is one of the important services. I hope that my hon. Friend will find that the information will be of some help to him and that it will assist the regional health authority when it comes to consider the particular case.
Having said that, I must go on to say that Ministers are always prepared to examine the position if matters reach stalemate and seem incapable of resolution satisfactorily at local level, but this does not appear to be the case here, or at least not yet. If my hon. Friend feels, after he has made his representations, and perhaps seen the regional health authority, that he is not making progress, if he would like me to, I shall try to accept an invitation to come and look at the particular problems on site. It might be as well to wait until the regional review and the district review have taken place, because that is the next stage.
The regional health authority has agreed that the consultation document issued by Kidderminster and district health authority will be discussed at the forthcoming district review meeting. I cannot obviously predict the outcome of that meeting or of the other 21 district review meetings due to be held in the region in the next few months. It is fair to say that Kidderminster will not be alone in pressing for an important project to be protected or advanced in the region's capital programme. This is what makes the regional health authority's task so very difficult.
I cannot give my hon. Friend the assurance that he would really like. The only assurance I can give is that the chairman of the regional health authority would welcome the chance to talk to my hon. Friend. I know that when the region has its review with the district they will take careful note of the case that has been made out. I shall make certain that the chairman has a copy of this debate, so that he can read what my hon. Friend has said.
I also undertake to keep an eye on developments. I shall ask my officials to let me know what transpires at the forthcoming district review meeting between the region and Kidderminster and district health authority. I hope that, as a result of this activity, my hon. Friend will not find it necessary to raise this matter again on the Adjournment.

Question put and agreed to.

Adjourned accordingly at twenty-one minutes past One o'clock.